Dangote Offers Kenya, Ethiopia, Rwanda 30% Stake in Planned $17bn Lamu Refinery

Kenya’s proposed 10% holding is valued at about $500 million, while the combined regional stake could raise about $1.5 billion for the project.

Aliko Dangote has offered Kenya, Ethiopia and Rwanda a combined 30 per cent equity stake in his planned oil refinery at Lamu, Kenya, opening the multibillion-dollar project to direct participation by East African governments.

David Ndii, economic adviser to Kenyan President William Ruto, disclosed the offer on Thursday at a capital markets forum in Nairobi, saying Kenya had been offered a 10 per cent stake valued at about $500 million, while Ethiopia and Rwanda had also expressed interest.

If the three countries take up the proposed allocation, their combined contribution could reach about $1.5 billion, Ndii said.

“The total for the region is about $1.5 billion,”

He said Dangote was also prepared to accommodate countries that may be unable to commit to taking crude or refined products from the project.

“I don’t actually see a challenge in doing that, and if some of them are not off-taking we will backstop,” Ndii said.

The proposed equity structure would give East African governments a direct ownership interest in a refinery designed to serve the region’s expanding fuel market, while potentially creating a pool of regional capital around one of Africa’s largest planned private industrial projects.

From Tanga to Lamu

The refinery is planned for Lamu on Kenya’s northern coast after Dangote’s group moved away from an earlier proposal to locate the project at Tanga in Tanzania.

Dangote confirmed in July that Lamu had been selected for the project, with soil testing, design and engineering work already under way. The refinery is expected to have a capacity of about 700,000 barrels per day, broadly matching the scale of Dangote’s flagship refinery in Lagos.

The project is expected to become the largest refinery in East Africa if completed as planned and would supply refined petroleum products to Kenya and other regional markets.

Ndii said groundbreaking could take place as early as September. Bloomberg reported that the refinery itself could cost about $16 billion, while the wider petrochemical complex and associated port infrastructure could push the total investment to about $20 billion.

Dangote Industries had previously put the cost of the Kenyan coast project at about $17 billion, with construction expected to take several years.

The location also gives the project access to Lamu’s deep-water port and the wider Lamu Port-South Sudan-Ethiopia Transport Corridor, potentially positioning the refinery as an energy hub for markets beyond Kenya.

Regional ownership

Kenya’s proposed 10 per cent holding would require about $500 million, according to Ndii. Ethiopia and Rwanda have indicated interest in participating, although the size of their potential individual stakes has not been disclosed.

The offer could therefore give the three countries a combined 30 per cent interest, with Dangote retaining the remaining 70 per cent.

The proposal also reflects a broader attempt to tie the refinery’s ownership structure to its intended regional market.

The planned facility is expected to process crude for Kenya and neighbouring countries, potentially reducing the region’s dependence on imported refined petroleum products. The project has been described as a replica of Dangote’s 700,000-barrel-per-day Lagos refinery and would become the Nigerian industrialist’s second major refining base.

Regional private investors have also shown interest.

Ndii cited Tanzanian businessman Mohammed Dewji as having previously expressed willingness to invest $100 million in the project.

Part of a larger refining expansion

The proposed Kenyan refinery is emerging as part of Dangote’s broader push to expand his refining business beyond Nigeria.

At home, Dangote Petroleum Refinery is preparing for a major capital-raising exercise as it seeks to expand its Lagos facility from its current 700,000-barrel-per-day capacity towards 1.4 million barrels per day.

The refinery has also secured significant new private capital. Reuters reported in July that it raised $2.5 billion through a private placement, while a separate report in August said the refinery had secured a $1 billion underwriting programme ahead of its planned Nigerian IPO, comprising a fully funded $600 million tranche and a further $400 million commitment linked to the offering.

The proposed IPO is expected to focus on Nigerian investors. Reuters reported that the company had submitted a $5 billion application to Nigeria’s Securities and Exchange Commission, although the final size of the offering remains subject to regulatory approval and market conditions.

Taken together, the capital-raising efforts and the proposed East African project point to an increasingly ambitious strategy around Dangote’s refining business: deepen the scale of the Lagos operation while establishing a second major refining base on the continent.

For East Africa, the proposed Lamu refinery would bring a different proposition — not simply another source of refined petroleum, but a project in which governments could become direct equity participants.

Whether Kenya, Ethiopia and Rwanda ultimately commit the proposed $1.5 billion will determine how far that regional ownership model moves from an offer on the table to an actual financing structure.