Nigerian billionaire Aliko Dangote and Kenyan President William Ruto have broken ground on a $16 billion oil refinery in Lamu that is planned to process 700,000 barrels of crude a day by 2030. The project would become East Africa’s largest refinery by capacity and includes a 1,000-megawatt power plant.
The refinery is being developed by Dangote Industries, which already operates a 700,000-barrel-per-day refinery in Nigeria. The company previously confirmed plans for an East African refinery in Lamu while discussing regional investment opportunities with Tanzania.
Regional Governments Offered a 30% Stake
Dangote has offered East African governments a combined 30% stake in the refinery, according to Reuters. Rwanda has expressed interest in taking as much as 10%, while other governments have also been invited to participate.
Presidents and leaders from Uganda, Ethiopia, Togo, and Benin attended the groundbreaking alongside Ruto. Dangote said the project was intended to demonstrate that the model established by his Nigerian refinery could be repeated elsewhere in Africa.
Kenya’s Energy and Petroleum Minister Opiyo Wandayi said the refinery would not depend solely on crude produced in East Africa. Dangote made a similar argument, pointing to Singapore as an example of a major refining centre that does not produce its own crude.
The new project would surpass Kenya’s $5.1 billion Standard Gauge Railway as the country’s largest infrastructure project since independence. Dangote said construction could create about 60,000 jobs at its peak.
Residents Raise Land and Environmental Concerns
The launch has also faced opposition from some Lamu residents over land compensation and environmental risks. A group of 133 residents has gone to Kenya’s High Court seeking to halt work on disputed land, with excavation and construction restricted there until the next hearing on October 14.
Walid Ali, co-founder of the Save Lamu campaign, said residents want access to the project’s environmental impact assessment and details of proposed safeguards. Dangote disputed the compensation complaints and said the company had taken only the land required from the area provided by the government.
Dangote also plans broader investments in power generation across Africa. He said projects in development are worth about $50 billion and include plans to build 10,000 megawatts of generating capacity by 2030, with the possibility of doubling that figure if demand supports it.
The Lamu refinery is Dangote’s largest proposed investment outside Nigeria. His Nigerian refinery is also pursuing an expansion to 1.4 million barrels a day after launching a public offering of 4.1 billion ordinary shares earlier in September.
Featured image credits: Magnific.com
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