Dangote Offers East African Countries 30% Stake in Planned Kenya Refinery

Nigerian billionaire Aliko Dangote has offered East African countries a combined 30% equity stake in his planned oil refinery in Kenya, potentially opening about $1.5 billion of the project to regional investors.

Kenyan President William Ruto’s economic adviser, David Ndii, disclosed the proposal Thursday at a capital markets forum in Nairobi. He said Kenya could take a 10% stake worth about $500 million, while Ethiopia and Rwanda have also expressed interest.

“The total for the region is about $1.5 billion,” Ndii said. “I don’t actually see a challenge in doing that, and if some of them are not off-taking we will backstop.”

The proposed refinery is planned for Lamu on Kenya’s coast and is expected to have a processing capacity of up to 700,000 barrels of crude oil per day. Dangote selected Lamu after the project had previously been considered for Tanga, Tanzania, with the company citing commercial and technical considerations.

The project’s estimated cost has varied in recent months. Earlier estimates put the investment at about $17 billion, while Dangote has more recently indicated a projected cost of between $15.5 billion and $16 billion. The refinery is expected to serve Kenya and wider East African markets.

For Dangote, the Kenyan project represents an expansion of a refining strategy that already includes his 700,000-barrel-per-day facility in Lagos. The Nigerian refinery is also preparing for a proposed initial public offering that could raise $5 billion, with a $1 billion underwriting program already secured.

If finalized, the proposed regional equity participation would give Kenya, Ethiopia, Rwanda and potentially other East African investors a direct ownership interest in one of the continent’s largest planned energy projects, while linking investment participation with potential access to refined petroleum products.

The proposal comes as East African countries seek to strengthen regional energy security and reduce dependence on imported refined fuels. Dangote has said the planned refinery is intended to help meet energy needs across the region and potentially supply markets beyond East Africa.