Dangote Group has confirmed plans to build a new $17 billion oil refinery in Kenya, marking its largest refining investment outside Nigeria. The refinery, to be located on Lamu Island, is expected to strengthen East Africa's energy security and reduce reliance on imported refined petroleum products.
Project Details and Capacity
The proposed refinery will process 700,000 barrels per day (bpd), eventually becoming the largest refinery in East Africa. According to Bloomberg, the Kenyan refinery will be a clone of the Dangote refinery in Lagos, which cost over $20 billion. The project was originally planned for Tanzania but was moved to Kenya after consultation with regional leaders.
Edwin Devakumar, vice president of Oil and Gas for Dangote Industries, told Reuters: 'Preliminary work has already started. The site has been selected, soil tests are under way, and design and engineering work has commenced. Kenya was the choice from the beginning.'
Financing Strategy
Devakumar stated that the new refining venture will be funded through internally generated funds, bond sales, and proceeds from an impending initial public offering (IPO), which could be announced as early as October. He declined to disclose a precise investment figure but confirmed it will be in line with the cost of the Lagos refinery, which eventually exceeded $20 billion, as reported by Punch.
Impact on Africa's Refining Landscape
The Kenya project is part of a wider drive to boost Africa's refining output. Dangote also plans to raise the Lagos refinery's capacity from 650,000 bpd to 1.4 million bpd by 2028. Africa currently exports roughly three-quarters of its crude oil production while importing approximately 70% of its refined petroleum products, according to estimates from the African Petroleum Producers' Organisation. A refinery of this scale in East Africa would meaningfully reduce the region's dependence on imported fuel and position Kenya as a central hub for petroleum supply across neighbouring countries.
Dangote's Expanding Refining Business
The Lagos refinery officially commenced operations and has been key to ending fuel scarcity and reducing imports in Nigeria. In a related development, Dangote Petroleum Refinery has opened the sale of petrol to all licensed marketers, ending its previous consortium marketing arrangement. This move is expected to reshape competition in Nigeria's downstream petroleum sector. The refinery said all qualified marketers can now purchase products directly from its loading gantry, widening access to locally refined petrol.
