Nigerian business magnate Aliko Dangote has revealed plans to secure approximately KSh 1.4 trillion (USD 11.2 billion) in debt financing for the construction of a major oil refinery in Lamu, Kenya.
The project, now valued at KSh 2.07 trillion (USD 16 billion), is expected to begin construction by October with a targeted completion timeline of four years. This marks a revision from the initial estimate of KSh 2.2 trillion (USD 17 billion), reflecting efficiencies identified by Dangote's team.
Project Capacity and Supply
The Lamu refinery is designed to process 700,000 barrels of crude oil daily, making it the largest refinery in East Africa and surpassing Dangote's existing Lagos facility, which processes 650,000 barrels per day.
Fuel produced will serve markets across eastern and northern Africa, including Egypt. Crude supply will primarily come from Uganda's oil fields via the East African Crude Oil Pipeline, supplemented by Kenya's Turkana oil reserves and imports through the Port of Lamu.
Government Role and Protection
Dangote has called on President William Ruto's administration to provide land for the refinery and assist in mobilizing regional financing. He emphasized the necessity of government protection against the influx of cheap petroleum imports from Russia and India, stating, "No refinery in the world can survive without that protection."
President Ruto has expressed intentions for Kenya to invest in the refinery through the National Infrastructure Fund, though details on the government's equity stake remain undisclosed.
Financing Structure and Business Outlook
- The project’s financing is planned as 70% debt and 30% equity.
- Dangote’s net worth stands at USD 30.1 billion (KSh 3.89 trillion), with business interests spanning cement, sugar, fertiliser, and oil refining.
- The announcement coincides with preparations to list Dangote's Nigerian refinery on the stock exchange.
