Dangote Offers East African Governments 30% Stake in Proposed Refinery

By Adedapo Adesanya

African business mogul, Mr Aliko Dangote, has offered some East African countries a combined 30 per cent equity stake in his proposed oil refinery in Kenya, potentially giving regional investors access to about $1.5 billion worth of the project.

Mr David Ndii, economic adviser to Kenyan President William Ruto, disclosed this on Thursday at a capital markets forum in Nairobi.

Mr Ndii said Kenya would take a 10 per cent stake in the proposed refinery, valued at about $500 million, while Ethiopia and Rwanda had also expressed interest in participating in the project.

“The total for the region is about $1.5 billion,” Mr Ndii said, adding that Mr Dangote was prepared to support the project if some participating countries were unable to commit as crude off-takers.

The proposed refinery is expected to be developed in Lamu, a coastal town in southeastern Kenya, after Dangote initially proposed building the facility in Tanga, Tanzania.

Business Post had reported that the decision to relocate the project to Kenya was based on commercial and technical considerations.

The planned refinery would mark an expansion of Dangote’s refining operations beyond Nigeria and provide East African countries with direct equity participation in a major energy infrastructure project, alongside potential access to refined petroleum products.

The project was initially announced for Tanzania, where Dangote had proposed building a refinery in Tanga similar to his 700,000-barrel-per-day facility in Lagos.

Mr Dangote announced the Tanzania plan during a panel session at the Africa Finance Corporation summit in Nairobi, where he appeared alongside President Ruto and Ugandan President Yoweri Museveni.

The project was subsequently shifted from Tanga to Lamu, with Dangote citing commercial and technical considerations for the change. Also, the Tanzanian government said it wasn’t consulted before the decision was announced.

The anticipated refinery and associated infrastructure on Kenya’s coast could cost about $17 billion and take approximately five years to complete.

The proposed 30 per cent regional stake is expected to provide East African investors with significant participation in the development of the refinery while broadening Dangote’s refining footprint across the continent. It will also help shield against shocks like the disruptions in the Middle East.