- Dangote confirmed Kenya as the final location for its planned refinery
- The $17 billion facility will be built on Lamu Island
- The company plans to fund the project through internal cash flow, bonds and IPO
Aliko Dangote has settled on Kenya as the site for his proposed $17 billion oil refinery in East Africa, ending months of speculation over whether the project would land in Kenya, Tanzania or Uganda
Edwin Devakumar, vice president for oil and gas at Dangote Industries Limited, confirmed the decision to AFP and Reuters this week. The 700,000-barrel-per-day refinery will be built on Lamu Island, off Kenya’s coast, and is expected to take up to three years to complete
The facility would replicate Dangote’s 650,000-barrel-per-day refinery near Lagos, which came online in 2024 and remains Africa’s largest. Dangote plans to more than double that plant’s capacity to 1.4 million barrels per day by 2028, a target that would make it the largest refinery in the world
The Lamu project would mark Dangote Group’s biggest refining investment outside Nigeria and would supply refined petroleum products to Kenya and neighboring countries, reducing East Africa’s reliance on imported fuel
“The site has been selected, soil tests are under way, and design and engineering work has commenced. Kenya was the choice from the beginning,” Devakumar told Reuters
Why Dangote chose Kenya over Tanzania, Uganda
Dangote had considered several East African locations before settling on Lamu. Tanzania’s port city of Tanga was an early contender, and Dangote later signaled he was leaning toward Mombasa before the Lamu announcement. He also pledged directly to the leaders of Kenya and Uganda that he would build a replica of his Lagos-area refinery somewhere in the region
Dangote traveled to Tanzania late last month for talks with President Samia Suluhu Hassan, where his office said he explained the commercial and technical reasoning behind choosing Lamu over Tanzania, while also inviting Tanzania to participate in the investment
Devakumar has cited infrastructure, logistics and market considerations as the deciding factors behind the switch from Tanga to Kenya
Uganda’s involvement in the courtship, despite not hosting the plant, reflects the regional scope of the project. A refinery of this size in Lamu would be positioned to supply fuel across Kenya, Uganda and other East African markets that currently depend heavily on imported refined products
How Dangote tends to fund the refinery
Meanwhile, Devakumar told Reuters the Lamu refinery would be financed through a mix of internally generated cash flow, bonds and proceeds from a planned initial public offering, the same funding approach Dangote has used for prior projects
He did not disclose the project’s exact cost but said it would be comparable to the Lagos refinery
The Lagos refinery was initially budgeted at about $9 billion when construction began in 2013, but its final cost exceeded $20 billion by the time it started operating in 2024. A site relocation, engineering challenges, currency weakness, the COVID-19 pandemic and global inflation all pushed the project well past its original estimate
Devakumar did not also say when the Lamu refinery will be completed
