Dangote Offers East African Nations 30% Stake in Planned $16bn Refinery

Dangote Group is extending a 30% equity stake in its proposed $16 billion refinery in Kenya to East African nations, signaling a major regional energy initiative. Kenya, Ethiopia, and Rwanda have shown interest in participating in the ambitious project, according to Kenyan President William Ruto’s Economic Adviser, David Ndii.

Kenya is considering a 10% stake, estimated at $500 million, potentially bringing the total regional investment to approximately $1.5 billion. Ndii expressed confidence in securing this investment, even suggesting Kenya could backstop participation if some nations are hesitant. The proposed refinery aims to mirror the scale of Dangote's 700,000 barrels per day facility in Lagos.

Construction for the Kenyan refinery is slated to begin in September, with an estimated cost of $16 billion for the refinery itself and an additional $20 billion for associated petrochemical and port infrastructure. The facility is planned to process about 600,000 barrels of crude oil daily, sourced from oil fields in Uganda and Kenya. This project is poised to significantly boost Kenya's economy, with projections of injecting $4 billion annually and contributing up to 10% of the country's GDP.

While Uganda has not yet committed to investing in the Kenyan refinery, citing its own refining capacity plans, the project underscores Dangote's expanding energy ambitions across Africa. The Kenyan facility is also expected to enhance regional integration within the East African petroleum market by connecting crude production with a large-scale refining and distribution hub.

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The total for the region is about $1.5 billion. I don’t actually see a challenge in doing that, and if some of them are not off-taking we will backstop.