MOMBASA — African billionaire Aliko Dangote has commenced preliminary works on a massive $17bn (£13.4bn) oil refinery in Kenya, in a move that could fundamentally alter the energy landscape of East Africa.
The proposed facility, situated on Lamu Island off the Kenyan coast, is designed to process 700,000 barrels of crude oil per day. Once completed, it will be a near-replica of the tycoon’s flagship mega-refinery outside Lagos, Nigeria, making it the largest refining complex in East Africa.
Dangote Industries Limited confirmed that the project has moved past the drawing board. Soil testing and architectural design engineering are currently underway at the coastal site.
Shifting from imports to independence
For decades, East African nations have exported raw crude oil while spending billions of dollars annually on importing expensive, refined petroleum products from Europe and the Middle East. According to the African Petroleum Producers’ Organisation, the continent currently exports three-quarters of its crude but imports roughly 70% of its refined fuel.
The new Lamu facility is intended to break that reliance, supplying petrol, diesel, and aviation fuel to Kenya, Uganda, and other neighbouring states.
“The site has been selected, soil tests are underway, and design and engineering work has commenced,” Devakumar Edwin, Dangote Industries’ Vice President for Oil and Gas, told Reuters. He added that the coastal location was chosen over an alternative site in Tanzania for strict “commercial and technical reasons”.
The project follows a personal commitment made by Mr Dangote to Kenyan President William Ruto and Ugandan President Yoweri Museveni. President Ruto had previously announced that construction would begin this year, with an estimated build time of three to five years.
A $46bn continental empire
The multi-billion-dollar Kenyan project is part of an aggressive expansion strategy by the Nigerian industrialist.
Between 2026 and 2028, the Dangote Group plans to invest an additional $46bn across its oil, cement, and fertiliser businesses to accelerate industrialisation across sub-Saharan Africa. Part of this capital will double the capacity of the existing Lagos refinery from 700,000 to 1.4 million barrels per day by 2028, aiming for a total corporate refining capacity of 2.1 million barrels per day across West and East Africa.
Company officials stated that the Kenyan project will be funded through a mix of internally generated cash, corporate bonds, and a planned initial public offering (IPO).
Replicating the Lagos model
While the exact budget for the Kenyan plant remains fluid, executives expect costs to mirror the Lagos facility, which eventually surpassed $20bn before coming online in 2024. That project suffered years of delays due to currency fluctuations, global inflation, and supply chain constraints during the Covid-19 pandemic.
However, the eventual launch of the Lagos complex successfully insulated Nigeria from recent global fuel spikes driven by Middle East tensions.
That success has sparked a race across the continent to build domestic refining capacity. Beyond Dangote’s move into Kenya, Nigerian businessman Benedict Peters is eyeing a 200,000-barrel-per-day refinery in Mozambique, while Uganda is progressing with its own state-backed 60,000-barrel-per-day facility to secure its domestic energy future.
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