Dangote Group has announced plans to build a large oil refinery in Kenya as part of its efforts to expand its presence in Africa’s oil and gas industry. The company intends to finance the project through internally generated funds, bond sales, and money expected from its planned Initial Public Offering (IPO).
The proposed refinery will have the capacity to process 700,000 barrels of crude oil per day. It will be built on Lamu Island, located along Kenya’s coastline. Once completed, it is expected to become the biggest oil refinery in East Africa and play a major role in improving the region’s energy supply.
The new facility is expected to reduce Kenya’s and neighbouring countries’ dependence on imported refined petroleum products such as petrol, diesel, and aviation fuel. This will help strengthen energy security, lower transportation costs, and improve the availability of fuel across the region.
According to reports, the refinery is expected to take about three years to complete. It will serve not only Kenya but also several nearby countries, making it an important project for East Africa’s growing energy needs.
Edwin Devakumar, Vice President of Oil and Gas at Dangote Industries, confirmed that early work on the project has already started. He said the project site has been selected, soil testing is currently ongoing, and the design and engineering stages are already in progress. He added that Kenya was the preferred location for the refinery from the beginning.
Devakumar also explained that the project will be funded through a combination of the company’s own earnings, money raised from bond issuances, and proceeds from the group’s planned IPO. However, he did not reveal the exact amount needed for the investment.
He noted that the cost of the Kenyan refinery is expected to be similar to that of the Dangote Refinery in Lagos, Nigeria. That refinery, which has a processing capacity of 650,000 barrels per day, began commercial operations in 2024 after years of construction.
The Lagos refinery eventually cost more than 20 billion dollars, far above the original estimate of about 9 billion dollars announced in 2013. The increase in cost was caused by several factors, including changes to the project site, engineering challenges, the depreciation of Nigeria’s currency, disruptions during the COVID-19 pandemic, and rising global inflation.
The planned refinery in Kenya will be Dangote Group’s biggest refining investment outside Nigeria. It also reflects the company’s long-term goal of becoming one of Africa’s leading suppliers of refined petroleum products.
Before choosing Kenya, Dangote Group had considered building a refinery in Tanga, Tanzania. However, after reviewing infrastructure, transportation networks, and business opportunities, the company decided that Kenya offered a better location for the project.
If completed as planned, the refinery is expected to create jobs, attract new investments, support economic growth, and improve fuel supply across East Africa. It will also strengthen Dangote Group’s position as one of the continent’s leading players in the energy sector.
