Aliko Dangote, Africa's richest person, has offered East African countries a combined 30% equity stake in his proposed $17 billion oil refinery in Kenya. This regional participation is valued at approximately $1.5 billion and is intended to provide countries with a direct interest in a significant energy infrastructure project, potentially securing access to refined petroleum products. Kenya's President William Ruto's economic adviser, David Ndii, announced this development at a capital markets forum in Nairobi, stating that Kenya would acquire a 10% stake, valued at about $500 million. Ethiopia and Rwanda have also expressed interest in participating in the project.
The refinery, initially planned for Tanga in Tanzania, has been relocated to Lamu, a coastal town in southeastern Kenya, due to commercial and technical considerations. The project is expected to take approximately five years to complete. Ndii also noted that Dangote is prepared to support the project if some participating countries are unable to commit as crude off-takers, indicating a willingness to backstop any shortfalls.
The proposed 30% allocation to East African countries could involve a broader regional investor base beyond Kenya, Ethiopia, and Rwanda, as the United Nations geoscheme for Africa defines Eastern Africa as comprising 18 sovereign countries. This move aligns with Dangote's broader strategy of using capital markets and regional investment to fund the expansion of his refining business across Africa. The Dangote Petroleum Refinery in Nigeria currently has a 700,000-barrel-per-day capacity, with plans to increase this to 1.4 million barrels per day. The group recently secured a $1 billion underwriting program for a planned IPO of its Nigerian refining business, highlighting its approach to financing expansion through public offerings and private placements.
