"No challenge": Kenya secures huge stake in Dangote’s Lamu mega-refinery
This story has significance for readers across Kenya and beyond.
- Aliko Dangote's conglomerate offered East African nations a 30% equity stake in a planned 700,000-barrel-per-day refinery at Lamu Island
- Kenya's top economic adviser David Ndii disclosed the offer, with Kenya set to take a 10% stake worth approximately $500 million
- Ethiopia and Rwanda have expressed interest in participating, while construction is scheduled to begin in late 2026
Aliko Dangote's business conglomerate has offered East African countries a combined 30% equity stake in a planned mega-refinery on Kenya's Lamu Island, in what would mark a significant expansion of the Nigerian billionaire's refining operations beyond West Africa.
Kenya's chief economic adviser David Ndii disclosed the offer at a Nairobi capital markets forum, revealing that regional nations would collectively invest around $1.5 billion in the $17 billion facility.
Kenya is earmarked for a 10% stake valued at $500 million, with Ethiopia and Rwanda already indicating their intent to participate.
"The total for the region is about $1.5 billion...if some of them are not off-taking, we will backstop,” Ndii told Bloomberg.
Lamu refinery's scale and location
The proposed facility would have a processing capacity of 700,000 barrels per day, making it the continent's second-largest refining complex after Dangote's existing 650,000-bpd Lagos refinery, which it is designed to replicate.
The planned output would exceed East Africa's current refined fuel demand of roughly 450,000 bpd, generating surplus capacity for export to other African markets.
Lamu was selected ahead of competing sites such as Mombasa and Tanzania's Tanga port, largely on account of its deep-water harbour capable of handling fully laden Post-Panamax crude tankers.
The site's proximity to the Lamu Port-South Sudan-Ethiopia Transport (LAPSSET) Corridor also factored into the decision, offering a direct link to inland regional markets.
The refinery is designed to supply fuel across Kenya, Uganda, South Sudan, Rwanda, Burundi and the Democratic Republic of Congo.
Dangote refinery project financing
President William Ruto's administration has formally prioritised the project, establishing a government committee under Deputy President Kithure Kindiki to oversee implementation.
The Dangote Group intends to finance the development through internal cash flows, bond issuances and proceeds from a planned initial public offering, reducing dependence on external loans.
Uganda has not yet committed to participating, citing its own separate refinery plans. Tanzanian billionaire Mohammed Dewji has separately expressed interest in investing $100 million in the project.
Ndii indicated that Kenya was prepared to underwrite the investment should some partner countries decline to participate as crude off-takers.
"We don't actually see a challenge in doing that," he said.
Economic Projections and Timeline
The refinery is projected to create approximately 60,000 jobs during construction and operation. Ndii said the project would inject around $4 billion in annual investment, potentially contributing up to 10% of Kenya's GDP when measured alongside other major industrial undertakings.
Geotechnical surveys and engineering design work are already under way, with full construction expected to commence in late 2026.
The facility is anticipated to take between three and five years to complete.
Extensive environmental assessments will be required before work proceeds, given that Lamu holds UNESCO World Heritage status.
Dangote has also indicated that the refinery would need anti-dumping protections against cheaper imported fuel, a condition that could significantly alter the region's existing petroleum import trade.
Source: TUKO.co.ke
Reporting originally appeared via TUKO. Read the full source for additional context.