Nigerian billionaire Aliko Dangote is targeting October for the groundbreaking of a proposed US $16bn oil refinery in Kenya, potentially moving one of East Africa’s largest planned energy investments into the construction phase after years of preparation.
Dangote Group President Aliko Dangote said preparations for the project have progressed significantly and that construction could begin shortly after the groundbreaking ceremony. Speaking to the BBC, Dangote said the refinery is expected to be completed in less than four years once construction gets underway.
The proposed facility is designed to process 700,000 barrels of crude oil per day, making it one of the largest planned refineries in Africa. Rather than serving Kenya alone, the project is being positioned as a regional energy hub capable of supplying refined petroleum products to markets across East Africa and potentially other African countries.
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East African Oil Refinery
Dangote said the estimated cost of the project has been reduced to approximately US $16bn, compared with an earlier projection of US $17bn. The lower estimate is partly linked to expectations that the refinery will be constructed faster, reducing financing expenses. Experience gained from building Dangote’s refinery in Lagos is also expected to improve project execution and efficiency.
The investment would be financed through a combination of shareholder capital and borrowing. Dangote said the proposed structure would see 30% of the project funded through equity and 70% through debt, with the group confident it can raise the required financing.
The scale of the planned investment could have significant implications for Kenya’s energy and industrial sectors. A large domestic refinery would provide additional refining capacity in a region that remains heavily dependent on imported petroleum products, while potentially strengthening Kenya’s position in regional fuel supply and logistics.
For Dangote, the Kenyan project would also expand the company’s footprint beyond Nigeria and reinforce its strategy of investing in large-scale African industrial infrastructure. The group’s experience with its major Lagos refinery is expected to provide technical and financial lessons for the new development.
If the October groundbreaking proceeds as planned, the project could enter a critical implementation phase, creating opportunities for contractors, engineering firms, logistics companies and other suppliers while supporting employment and wider industrial activity in Kenya. The refinery is ultimately intended to serve a broader East African market, with Dangote describing the investment as part of efforts to increase Africa’s ability to meet its own energy requirements and reduce dependence on imported refined fuels.
