Rwanda interest puts Dangote’s Lamu refinery at centre of East Africa’s fuel market

Rwanda's interest in Aliko Dangote's proposed Lamu oil refinery is expanding the project's regional scope, with East African governments now seen as potential investors. President Paul Kagame disclosed that Rwanda held early-stage talks about a stake in the refinery, expressing willingness to participate. Economic adviser to Kenya's President William Ruto, David Ndii, revealed that Dangote had offered a combined 30 percent stake to East African countries.

Kenya is pegged to acquire a 10 percent stake valued at $500 million, while Ethiopia and Rwanda are interested parties. The project is expected to cost $16 billion for the refinery and an additional $20 billion for petrochemical facilities and port infrastructure, with the total investment potentially reaching $20 billion. The refinery's capacity of 700,000 barrels per day would rival Dangote's Lagos facility in Nigeria.

The refinery is projected to supply refined products to Kenya and neighbouring markets, including Uganda, South Sudan, Rwanda, and Ethiopia. For Rwanda, investing could provide a stake in a market it currently imports fuel from. Kenya's 10 percent stake carries a significant $500 million commitment and faces challenges such as securing reliable crude supplies and competing against imported refined products.

The project's progress hinges on obtaining crude from regional oil fields and navigating regulatory approvals. With construction expected to commence later this year, the refinery could become a pivotal energy and logistics hub in East Africa, solidifying Dangote's presence in the region's fuel market and involving the three governments in a major energy venture.