Dangote Group to Build $17 Billion Refinery in Lamu

Dangote Industries Limited will construct a 700,000 barrel-per-day oil refinery on Lamu Island, Kenya, as part of a broader strategy to increase the group's total refining capacity to 2.1 million barrels per day. The project, estimated at $17 billion, is designed to reduce East Africa's reliance on imported petroleum and mirror the company's existing $20 billion facility in Lagos, Nigeria.

The company selected Lamu over potential sites in Mombasa and Tanzania due to superior infrastructure, logistics, and market demand. Financing will involve internally generated cash, bond issuances, and a planned initial public offering on the Nigerian Exchange and potentially in New York. Construction is expected to begin in 2026 and take approximately 30 months to complete.

President William Ruto announced that regional governments will invest in the facility, with Kenya providing Ksh 21.5 billion in seed capital. Aliko Dangote has invited Tanzania to participate as an investor following talks with President Samia Suluhu Hassan. Tanzanian businessman Mohammed Dewji has expressed readiness to invest $100 million, despite a stated preference for the refinery to have been located in Tanzania.

This expansion coincides with a surge in demand for the group's Nigerian operations driven by US-Iran conflict disruptions. While the Nigerian refinery reached full capacity in February, it continues to face challenges securing sufficient local crude oil from the Nigerian National Petroleum Company Limited due to the agency's export and loan obligations.