Africa’s richest man, Aliko Dangote, has announced that construction of the proposed Lamu oil refinery in Kenya is expected to commence in October 2026, with the estimated cost of the project now put at about $16 billion.
Dangote disclosed this in an interview with the BBC, saying preparations for the project had reached an advanced stage and that groundbreaking would take place no later than October.
According to him, the refinery is being developed to strengthen energy security in Kenya and supply refined petroleum products to other countries across East Africa.
“The plans for the refinery have gone very far with Kenya because what we are trying to do is to make sure that in most African countries we make them sufficient in their own energy needs,” Dangote said. He explained that construction would begin immediately after the groundbreaking ceremony and was expected to take less than four years to complete.
The proposed facility is planned to have a refining capacity of 700,000 barrels of crude oil per day, which would make it one of the largest planned refineries on the African continent.
Dangote said the refinery would not focus exclusively on the Kenyan market, noting that its output could be supplied to several countries within the East African region and potentially other markets, including Egypt.
Project Cost Revised Downward. The billionaire also revealed that the estimated cost of the refinery had been reduced from an earlier projection of about $17 billion to approximately $16 billion.
He attributed the reduction partly to experience gained from the construction of the Dangote Refinery in Nigeria, saying the company now has greater experience and expects the Kenyan project to be completed more quickly.
“It will cost less because this one will be faster, so in terms of financing cost it will be less, and then we are wiser as a company than when we built the one in Nigeria,” he said.
The project was previously estimated at around Ksh2.2 trillion, but the revised figure is now approximately Ksh2 trillion.
Equity, Debt To Fund Project. Dangote said the refinery would be financed through a combination of equity and debt.
Under the proposed financing structure, the company is expected to provide 30 per cent of the project cost through equity, while the remaining 70 per cent will be raised through debt financing.
Once completed, the refinery is expected to significantly increase Kenya’s domestic refining capacity while reducing reliance on imported petroleum products.
The project is also expected to generate thousands of jobs during construction and operation, with opportunities anticipated across engineering, logistics, manufacturing, energy and other related sectors.
Dangote said the broader objective was to develop energy infrastructure capable of supporting self-sufficiency across African countries and reducing dependence on petroleum imports.
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