Dangote Group is preparing to finance its proposed 700,000-barrel-per-day oil refinery in Kenya through a combination of internal cash flow, bond issuance and proceeds from a planned initial public offering.
The project, which is expected to become East Africa’s largest refinery, would supply refined petroleum products to Kenya and neighbouring countries. It is also expected to reduce the region’s heavy dependence on imported fuels.
Edwin Devakumar, Vice President for Oil and Gas at Dangote Industries, said the company has already selected a site for the refinery, while soil testing, design and engineering work have begun.
“The site has been selected, soil tests are underway, and design and engineering work has commenced. Kenya was the choice from the beginning,” Devakumar told Reuters.
Refinery to be built in Lamu
The proposed refinery will be located on Lamu Island, off Kenya’s coast. If completed, it would become Dangote Group’s biggest refining investment outside Nigeria.
The facility is expected to take up to three years to build and would strengthen Dangote’s push to expand fuel-processing capacity across Africa.
The project follows the launch of Dangote’s 650,000-barrel-per-day refinery in Lagos, which started operations in 2024 after years of construction delays and cost increases.
Devakumar said the Kenyan refinery would be funded using company cash, bonds and money raised from a planned IPO. He did not give the exact cost of the project but said it would be similar to the cost of the Lagos refinery.
Lagos refinery cost exceeded $20bn
The Lagos refinery, built by Aliko Dangote, cost more than $20 billion by the time it began operations.
The project was initially estimated at about $9 billion in 2013, but the final cost rose due to several factors, including site relocation, engineering difficulties, currency depreciation, the COVID-19 pandemic and global inflation.
The refinery remains one of Africa’s largest industrial projects and has become central to Dangote’s wider energy ambitions on the continent.
Why Kenya was chosen
Dangote Group had previously considered building a major refinery in Tanzania, particularly around the port city of Tanga. However, the company later shifted its focus to Kenya.
The decision was influenced by infrastructure, logistics and market access considerations.
The planned Kenyan refinery would give Dangote a major base in East Africa and position the group to serve regional fuel demand more directly.
For Kenya and its neighbours, the project could improve fuel supply security, create jobs and reduce exposure to global supply disruptions.
