Dangote’s planned Kenya refinery to cost $17 billion, take five years to build
By Aboki Forex —
The proposed oil refinery by the Dangote Group on Kenya’s coast will cost an estimated $17 billion and take about five years to complete, according to a company spokesperson. The project is expected to replicate the scale and design of the Dangote Refinery in Lagos, which is Africa’s largest single-train refinery.
Project details and timeline
The development was reported by Bloomberg on Tuesday, citing a spokesperson for Dangote Industries Ltd, who confirmed the estimated cost and construction timeline. The planned refinery will be located in Lamu, a coastal town in southeastern Kenya, after initial plans had pointed to Tanga, Tanzania. Aliko Dangote, Africa’s richest man, said Lamu was selected for commercial and technical reasons.
The latest details build on commitments made by Dangote earlier this year during a panel at the Africa Finance Corporation Summit in Nairobi in April. Speaking before Kenyan President William Ruto and Ugandan President Yoweri Museveni, Dangote said his company was prepared to replicate the size and capacity of its Lagos refinery in East Africa through a regional partnership. “We are discussing that we are going to have a joint refinery in Tanga to benefit all of us,” he said at the time.
Regional energy strategy
Dangote pledged to lead the execution of the project and expressed confidence it could be delivered quickly. “My commitment today here is that we will lead the refinery. We’ll make sure that the refinery is built within the next four to five years,” he said.
The regional ambition was reinforced in May when Ugandan President Yoweri Museveni disclosed that he had held discussions with Dangote on the project, linking it to Uganda’s energy strategy. Museveni said Uganda deliberately delayed commercial oil production because it considered domestic refining a strategic priority before exporting crude oil. “That is why Uganda delayed oil production because we insisted on first having a refinery. Without refining our oil, it would not make economic or strategic sense to simply export crude oil while others benefit from the finished products,” Museveni said.
Impact on African refining capacity
The proposed Kenyan refinery is expected to become one of Africa’s largest crude-processing facilities upon completion. It underscores a growing push by African countries to increase domestic refining capacity and reduce dependence on imported petroleum products. Its design mirrors the Dangote Refinery in Lagos, which recently reached full operational capacity and significantly reduced Nigeria’s reliance on imported fuel. The Nigerian facility has also reversed a long-standing decline in Africa’s refining capacity.
Other African countries are pursuing similar projects. Mozambique is considering a proposed 200,000-barrel-per-day refinery backed by Nigerian businessman Benedict Peters, while Uganda plans to develop a 60,000-barrel-per-day refinery to meet domestic demand and supply neighbouring markets around Kenya and Tanzania.
Dangote’s expansion plans
Dangote’s East African refinery ambitions come as the company continues an aggressive expansion of its flagship complex in Lagos. The refinery currently processes around 650,000 barrels of crude oil per day, but plans are underway to more than double its capacity to approximately 1.4 million barrels daily over the next few years. If completed, the expansion would make the facility one of the world’s largest refining complexes.
To finance the expansion, the African Export-Import Bank (Afreximbank) is backing $2.5 billion of a broader $4 billion syndicated term loan. The Dangote Group has also signed a $400 million agreement with Chinese equipment manufacturer XCMG Construction Machinery to accelerate work across the refinery complex. Annual polypropylene production is projected to rise from about 900,000 metric tonnes to roughly 2.4 million metric tonnes, reinforcing the refinery’s importance to Africa’s manufacturing value chain.
For Nigerian businesses and the naira, the expansion of domestic refining capacity across Africa could reduce the continent’s fuel import bill and ease pressure on foreign exchange reserves, though the immediate impact will depend on project timelines and regional trade dynamics.