Dangote Group has offered East African countries a combined 30 per cent stake in its proposed 700,000-barrel-per-day refinery planned for Lamu, Kenya, according to a report by Bloomberg.
Kenya is expected to take a 10 per cent stake in the project, estimated at about $500 million, David Ndii, a top economic adviser to President William Ruto, told Bloomberg at a capital market conference in Nairobi on Thursday.
“The total for the region is about $1.5 billion. I don’t actually see a challenge in doing that, and if some of them are not off-taking we will backstop,” Ndii was quoted as saying.
Ethiopia and Rwanda are also said to have indicated interest in participating in the project.
The proposed refinery, which will be located in the southeastern coastal town of Lamu, is expected to process 700,000 barrels of crude per day and cost between $15 billion and $17 billion.
The groundbreaking is expected to begin next month.
The project would give Dangote Group a major foothold in East Africa and place the company on track to double its refining capacity to 1.4 million barrels per day within the next three years.
Dangote’s existing refinery near Lagos has already increased its processing capacity to 700,000 barrels per day from its original capacity of 650,000 barrels per day.
The company is expanding into East Africa after overcoming years of delays and challenges in bringing its Nigerian refinery into operation.
The Lagos refinery, initially projected for completion in 2016, eventually commenced operations eight years later after delays linked to logistics challenges, infrastructure constraints and the COVID-19 lockdowns.
During the refinery’s early operations, Aliko Dangote accused international oil companies and regulators of frustrating efforts to ensure smooth operations.
He alleged that international oil companies were undermining the refinery’s operations and claimed that the Nigerian Midstream and Downstream Petroleum Regulatory Authority had issued licences to some companies to import what he described as “dirty fuel” as part of efforts to frustrate his plan to reduce Nigeria’s dependence on imported petroleum products.
At an investment conference in June 2024, Dangote said, “I knew there would be a fight. But I didn’t know that the mafia in oil, they are stronger than the mafia in drugs.”
The refinery recently raised $2.5 billion through a private placement ahead of its planned $5 billion initial public offering scheduled for October.
The capital raise, which was 3.7 times oversubscribed, valued the refinery at $40 billion and attracted interest from African and international institutional investors.
With the proposed Kenyan refinery, Dangote Group is seeking to expand its refining footprint across Africa while strengthening its position in the continent’s petroleum and energy market.
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