Aliko Dangote has extended an offer to East African countries for a significant stake in his proposed $20 billion Lamu oil refinery in Kenya. Kenya, specifically, has been offered a 10% stake worth approximately $500 million. In total, Kenya, Ethiopia, and Rwanda have been invited to participate in a combined 30% regional shareholding, amounting to $1.5 billion. This announcement comes as the project moves closer to a targeted September groundbreaking.
David Ndii, economic adviser to Kenyan President William Ruto, confirmed these details at the Mwango Capital Markets Forum in Nairobi. Ndii stated that Kenya's proposed investment would be roughly KSh64.7 billion ($500 million), while the overall regional investment across the three countries would reach KSh194.2 billion ($1.5 billion). This regional participation aims to provide both capital and crucial political backing for the refinery's success in the East African market.
The Lamu refinery, with a reported total project cost of approximately $20 billion, is designed to process up to 700,000 barrels of crude oil per day, mirroring the capacity of Dangote's Lagos refinery. The facility is intended to supply refined products across the broader East African market, rather than just Kenya. Crude oil supply is central to the refinery's commercial viability, with regional production from South Sudan (350,000 bpd), Uganda (250,000 bpd), and Kenya (120,000 bpd) expected to feed the facility.
Dangote has outlined specific conditions for the project, including land provision, regional financial support, and a policy framework to shield the refinery from competition from cheaper imported petroleum products, particularly from Russia and India. Kenya currently relies heavily on imported refined petroleum. Ndii also mentioned a potential backstop arrangement for countries not committing to upfront product purchases, aiming to broaden the customer base. The September groundbreaking, if realized, will test the commitment of Kenya and its neighbors to invest billions in this long-term, capital-intensive energy project.
