Dangote Begins New Refinery Construction, Offers Three East African Countries 30% Stake
- Aliko Dangote plans a $17 billion refinery expansion in Kenya, targeting East Africa’s energy market
- Kenya, Ethiopia, and Rwanda could collectively contribute $1.5 billion to the project, enhancing regional energy cooperation
- Dangote’s strategy includes increasing refining capacity in Nigeria, aiming for greater investment and market engagement in East Africa
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Pascal Oparada is a journalist with Legit.ng, covering technology, energy, stocks, investment, and the economy for over a decade.
Nigerian industrialist and President of Dangote Industries Group, Aliko Dangote, is planning a major expansion of his refining business into East Africa with a proposed $17 billion refinery in Kenya.
Kenya has reportedly been offered a 10 per cent equity stake in the project, while Ethiopia and Rwanda have also expressed interest in participating, according to David Ndii, economic adviser to Kenyan President William Ruto.
Source: Getty Images
Speaking at a capital markets forum in Nairobi, Ndii said Kenya’s proposed stake could be worth about $500 million, while the combined contribution from the three East African countries could reach approximately $1.5 billion.
“The total for the region is about $1.5 billion,” Ndii said.
He added that Dangote was prepared to support participating countries that may struggle to commit to purchasing refined petroleum products from the refinery, according to a report by Leadership.
Project moved from Tanzania to Kenya
The planned refinery was initially considered for Tanga, Tanzania, but Dangote subsequently shifted the project to Lamu on Kenya’s coast after evaluating commercial and technical considerations.
The project, which will include the refinery and associated infrastructure, is expected to cost about $17 billion and could take roughly five years to complete.
The proposed facility would mirror the scale of Dangote’s massive refinery in Lagos and potentially transform the supply of refined petroleum products across East Africa.
Ndii said the project had already attracted interest from private investors in the region. Tanzanian businessman Mohammed Dewji, he noted, had previously indicated a willingness to invest $100 million.
Dangote expands refining ambitions
The Kenya project forms part of Dangote’s broader strategy to expand his refining footprint beyond Nigeria while tapping capital markets to finance future growth.
In Nigeria, the Dangote Petroleum Refinery is targeting an increase in capacity from its current 700,000 barrels per day to 1.4 million barrels per day.
The company is also pursuing plans to access additional capital through a potential listing.
Source: Getty Images
Ndii referenced financing arrangements involving a reported $1 billion underwriting programme, comprising a completed $600 million private placement and a further $400 million commitment, subject to regulatory and market conditions.
If the Kenyan project proceeds, the proposed equity structure could give Kenya, Ethiopia and Rwanda direct ownership in a major energy project while strengthening their access to refined fuel supplies.
It could also deepen the connection between East African capital markets, local investors and the region’s growing energy needs.
Dangote Refinery takes on US fuel exporters
Legit.ng earlier reported that refiners in the United States and India have increased fuel exports as disruptions affect supplies from Russia and the Middle East, according to Reuters, citing government data, shipping records, analysts and traders.
The supply squeeze has forced major fuel-importing countries to seek alternative sources of diesel, petrol and aviation fuel. Dangote Refinery is increasingly benefiting from that shift, expanding beyond Nigeria and other African markets to compete for buyers in Europe.
Source: Legit.ng
