Dangote Plans $16 Billion Refinery at Kenya’s Port of Lamu

Aliko Dangote was set to break ground on Wednesday on a planned $16 billion oil refinery at Kenya’s port of Lamu, with the project presented as a major industrial undertaking for East Africa.

The proposed refinery is designed to process 700,000 barrels of crude oil per day and is targeted for completion within 30 to 40 months. Kenyan President William Ruto, Ethiopian Prime Minister Abiy Ahmed and Ugandan President Yoweri Museveni joined Dangote for the ceremony.

“This is Africa coming together to build Africa. Today we are not simply breaking ground for a refinery, we’re breaking ground for a new chapter in Africa’s industrial journey,” Dangote said.

Legal and environmental concerns

A court ruling published on Monday allowed the ground-breaking to proceed while a case brought by a local community over land rights continues.

Greenpeace and other environmentalists have also objected to the project’s potential impact. Ruto said concerns involving local land and the environment “will be handled lawfully and fairly.”

Lamu is a tourist destination and home to a Swahili settlement founded in the 12th century. It is also identified as a UNESCO World Heritage site.

Responding to legal challenges, Dangote said: “We’re not really scared of people taking us to court. Anybody who wants to cause trouble, we are ready for his trouble and will give him a headache.”

Regional energy ambitions

The refinery is planned to include a 1,000-megawatt power facility, with half of its output intended for Kenya’s electricity grid.

Most of the crude processed at the facility will initially have to be brought by ship from other regions. Dangote said supplies would come from the Middle East, the United States and other areas, while the refinery would be positioned to use increased production from countries including Kenya and Mozambique.

Dangote said Lamu was selected for its deep seaport and solid land after Tanzania had initially been considered as a possible location.

The project is being framed as a way to reduce Africa’s dependence on imported refined fuel and foreign expertise. Dangote, who created Africa’s biggest oil refinery in Nigeria, said the continent had long exported crude while importing refined products.

“For too long, our continent has actually been rich in resources but poor in value creation and addition. We have exported crude oil and imported refined products,” he said.

Ruto cited figures showing that Africa produced 6.8 million barrels of crude oil per day in 2024 while consuming 4.5 million of refined petroleum products.

Competition from rival project

The Lamu proposal comes as Uganda and Tanzania pursue a rival $20 billion refinery and energy hub at the Tanzanian port of Tanga. The two countries announced the plan in August, although details of the venture remain limited.

Uganda is expected to begin producing its first oil in the coming weeks and has almost completed a pipeline to Tanzania’s coast in collaboration with TotalEnergies.

Dangote’s Lamu project remains subject to the ongoing land-rights proceedings and environmental objections, while its 30-to-40-month completion period is a target rather than a confirmed operating date.