Nigerian billionaire Aliko Dangote has started construction of a $16bn (N21.25tn) oil refinery in Kenya, a project designed to reduce East Africa’s reliance on costly fuel imports, reported Reuters.
The facility, planned for Lamu Port on the country’s northern coast, aims to reduce fuel costs in East Africa and decrease the region’s reliance on imported refined petroleum products.
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The groundbreaking ceremony was attended by Dangote and Kenyan President William Ruto, alongside leaders from Ethiopia, Uganda, Benin and Togo.
The facility is intended to mirror the Dangote Group’s 700,000 barrel per day (bpd) refinery in Nigeria, with a target completion date of 2030.
Dangote has proposed offering regional governments a combined 30% stake, with plans to eventually list the company’s equity on the Nairobi Securities Exchange.
The project, according to President Ruto, is set to become the largest foreign direct investment in Kenya’s history.
Ruto stated that the refinery could increase Kenya’s annual gross domestic product by 12%.
“It is an investment in energy security, industrialisation and regional integration,” said Ruto.
Engineers India has received a $450m (Rs43.3bn) contract for project engineering, while Honeywell Technologies has been engaged to deliver technology support.
Dangote said the refinery would enable energy self-sufficiency across a region stretching from Ethiopia to Mozambique by supplying petroleum products for local demand and exporting jet fuel to European and British markets.
“We are breaking ground for a new chapter in Africa’s industrial journey to a brighter future,” Dangote added.
The complex will incorporate a 1GW power plant intended to supply electricity to the refinery and sell surplus to other consumers.
The project is forecast to generate more than 50,000 jobs and stimulate downstream sectors including petrochemicals and bitumen manufacturing.
However, concerns remain regarding the availability of local crude oil supplies, the capacity of regional energy infrastructure, and possible environmental impact, particularly on Lamu Old Town, a UNESCO World Heritage site known for its marine life.
Kenya’s High Court has ordered preservation of parts of the site following a case brought by residents.
Dangote attributed the resistance to commercial interests whose existing business models would be undermined by the refinery.
