Dangote Opens 30% Lamu Refinery Equity To East Africa

Nigerian industrialist Aliko Dangote has offered East African countries a combined 30 per cent equity stake in his planned $16 billion refinery in Lamu, Kenya, with Kenya, Rwanda and Ethiopia expressing interest in participating in the project.

The offer comes as Dangote and Kenyan President William Ruto on Wednesday broke ground for the 700,000-barrel-per-day refinery at the Port of Lamu, formally launching construction of the project.

David Ndii, economic adviser to President Ruto, had earlier said Kenya was considering a 10 per cent stake valued at about $500 million, while Ethiopia and Rwanda had also expressed interest.

“The total for the region is about $1.5 billion,” Ndii said.

He added that the arrangement could proceed even if some participating countries did not commit to buying petroleum products from the refinery.

“If some of them are not off-taking we will backstop,” he said.

Rwandan President Paul Kagame also confirmed preliminary discussions with Dangote over Rwanda’s possible participation in the project.

“Rwanda would be happy to be part of this investment,” Kagame said, adding that “it is too early to talk about the details.”

The refinery, which is expected to cost about $16 billion, is designed to process 700,000 barrels of crude oil per day and is expected to become one of the largest refining facilities in Africa.

The wider project will include a 1,000-megawatt power plant and facilities for petrochemicals and other industrial products.

Speaking at the groundbreaking ceremony, Dangote described the project as “a new chapter in Africa’s industrial journey” and compared it with his refinery in Lagos.

“Lekki proved that it can be done, Lamu must prove that it can be repeated,” he said.

Dangote also pledged that the Lamu refinery would be completed within 40 months.

President Ruto has said the project could create about 60,000 jobs and strengthen Kenya’s position as a regional energy and industrial hub.

Dangote said the refinery would source crude from different suppliers rather than depend on a single source.

“You don’t go and build a refinery for only one source of crude. You take different types: Middle East crude, American, and WTI, so you mix them up,” he said.

Uganda is expected to be an important potential source of crude for the refinery, while Kenya is also working on plans to develop and transport crude from its Turkana oil fields to Lamu.

The project, however, faces legal and environmental concerns.

A Kenyan court has ordered parties in a land dispute involving 133 residents of Chandavai in Lamu to maintain the status quo on the disputed parcel pending further proceedings. The case is scheduled for hearing on October 14.

The court order did not prevent the planned groundbreaking ceremony, although activities on the disputed site could be affected. Dangote Group had said the ruling would not halt the official groundbreaking.

Environmental groups have also raised concerns about the potential impact of the project on Lamu’s marine ecosystem and surrounding communities.

The Lamu refinery is part of Dangote’s expansion beyond Nigeria, where his 700,000-barrel-per-day refinery in Lagos is operating and is being expanded further.