Dangote refinery faces fresh legal hurdle in Kenya

Dangote’s proposed $16bn oil refinery in Lamu, Kenya, has faced another legal challenge after a consumer rights group petitioned a Kenyan government panel over the approval process and proposed state investment in the project.

The Secretary-General of the Consumers Federation of Kenya, Stephen Mutoro, disclosed this in a post on X on Friday, saying the federation had filed a petition before the Public Private Partnerships Petition Committee under Section 75 of Kenya’s Public Private Partnerships Act, 2021.

The group is seeking details of the contracting authority, procurement process and approvals for the refinery, as well as records relating to its appraisal, due diligence and legal clearance.

It is also seeking clarification on a reported KSh21.5bn seed allocation and Kenya’s proposed 10 per cent stake in the project, reportedly valued at about $500m.

According to Mutoro, the petition is asking the committee to distinguish between funds budgeted, committed and disbursed by the Kenyan Government.

The federation also wants details of the vehicle through which Kenya would acquire its stake, the class of shares involved and the proposed payment terms.

The petition further questions possible government commitments relating to petroleum-product offtake, market protection and electricity supply, as well as potential contingent liabilities for taxpayers and consumers.

Mutoro said the group had requested the production of the relevant records within seven days, with the authorities expected to indicate where any requested record did not exist.

The federation is also asking the committee to set aside any approval found to be non-compliant with the law and remit the matter for reconsideration following appraisal, due diligence and conflict checks.

The latest petition comes days after 133 residents of Lamu approached a Kenyan court over land earmarked for the refinery.

The residents are challenging the use of land in the Hindi/Manda Magogoni area, with a status quo order reportedly issued on September 25.

Mutoro said the land case was separate from the consumer group’s petition.

The development came shortly after the President of Kenya, William Ruto, and Nigerian businessman and Chairman of Dangote Industries, Aliko Dangote, broke ground for the $16bn refinery on September 30.

The refinery is expected to have a processing capacity of 700,000 barrels per day and is scheduled for completion in 2030.

Speaking to the BBC ahead of the groundbreaking, Dangote dismissed the protests over the land, describing them as opposition from local marketers and international players, and insisted that the project would proceed.

He said, “To come and say some people are demonstrating, demonstrating about what? Have you ever seen people demonstrating against themselves in terms of development?”

Dangote also said he was prepared to defend his business interests, while accusing local marketers and international players of being behind the protests.

The refinery is expected to become Kenya’s largest infrastructure project since independence and Dangote’s biggest proposed investment outside Nigeria.

The project will also include a 1,000-megawatt power plant, while Dangote has offered regional governments a combined 30 per cent stake in the refinery, according to Reuters. (Punch)