Kenyan court pauses construction of $16bn Dangote refinery

Nigerian billionaire Aliko Dangote expressed surprise at his unfamiliarity with the Kenyan port town of Lamu prior to May 2023, when his conglomerate began evaluating potential sites for its envisaged East African oil refinery. During the inauguration of the Dangote East Africa Refinery in Lamu County, Dangote underscored the project's rapid pace among the company's African endeavors, declaring it the second-fastest major development after an Ethiopian fertilizer initiative.

The refinery, with a projected capacity of 700,000 barrels of crude oil daily, will be the largest in East Africa and the second-largest on the continent, following Dangote's own facility in Lagos, Nigeria. Kenya selected Lamu following assessments of Tanzania, Uganda, Mozambique, and Zanzibar, citing its strategic location and economic viability.

The port town's proximity to the Indian Ocean is anticipated to streamline crude oil imports from neighboring nations and global markets, while its developing infrastructure aims to accommodate extensive industrial operations. In April, Dangote unveiled plans to broaden his refining operations into East Africa, with the Lamu plant mirroring his Nigerian counterpart.

The proposed refinery is anticipated to cater to Kenya and neighboring markets, such as Uganda, Tanzania, South Sudan, and the Democratic Republic of the Congo, lessening dependence on imported refined petroleum products. The project's estimated cost stands at Sh2 trillion, a reduction from the previously projected Sh2.2 trillion.

Approximately 70% of the financing, amounting to about Sh1.4 trillion, is expected to be sourced through debt.