Dangote backs $660m Ethiopia-Djibouti pipeline as East African energy push widens
By Aboki Forex —
Aliko Dangote is deepening his East African footprint with a $660 million petroleum infrastructure project linking Ethiopia and Djibouti. The plan centres on a 120-kilometre pipeline for refined petroleum products, with a spokesperson for Ethiopian Prime Minister Abiy Ahmed telling Reuters it should be operational within 18 months.
The project will be developed by the Dangote Group in partnership with Ethiopian Investment Holdings, according to Abiy, who announced it during a visit to Djibouti alongside Djiboutian President Ismail Omar Guelleh and Dangote.
Storage capacity in Djibouti and Ethiopia
The pipeline will run from Damerjog in Djibouti to Dewele in Ethiopia. Storage facilities at Damerjog will hold about 375,000 cubic metres of petroleum products, while roughly 800,000 cubic metres of storage capacity will be built at Dewele. Combined, the storage component comes to approximately 1.175 million cubic metres.
Abiy said one of the main objectives is to cut transportation costs and delays along the Ethiopia-Djibouti trade corridor. Developers also expect the infrastructure to improve fuel supply reliability, strengthen energy security and make supply chains in both countries more resilient. Ethiopia relies heavily on Djibouti's ports for international trade.
Kenya refinery and other Ethiopian projects
The pipeline announcement lands as Dangote prepares for a far bigger East African energy play, a proposed $20 billion crude oil refinery in Lamu, Kenya. The refinery is designed to process up to 700,000 barrels of crude oil per day when completed, which would place it among Africa's largest refining facilities. Dangote has put the project value at about $20 billion, while Kenyan officials have previously estimated it at around $17 billion. Groundbreaking is expected.
The refinery is expected to serve Kenya and possibly neighbouring markets, extending Dangote's energy interests well beyond Nigeria.
Dangote Group already has other proposed projects in Ethiopia, including a fertiliser pipeline and power plant valued at about $4 billion, plus a polypropylene packaging facility.
There is also a gas-to-power plan in Kenya. Dangote Industries is reportedly in talks with the Kenyan government over a 1,000-megawatt liquefied natural gas power plant tied to the proposed Lamu refinery.
What it means for the region
Taken together, the Kenya refinery and the Ethiopia-Djibouti pipeline cover refining, storage and distribution, giving the Dangote Group a full chain across East Africa's downstream market. For Ethiopia, the pipeline offers a cheaper route for fuel imports that currently move by road from Djibouti. For Nigeria, the signal is that Africa's richest man is scaling refining capacity outside his home market, even as his 650,000-barrel-per-day refinery at Lekki remains the anchor of his energy business.