COFEK Seeks Details on Govt’s Ksh65 Billion Stake in Dangote Refinery

COFEK Seeks Details on Govt’s Ksh65 Billion Stake in Dangote Refinery

The Consumers Federation of Kenya (COFEK) has petitioned the Public Private Partnerships Petition Committee seeking details on Kenya’s proposed investment and commitments to the planned Dangote East Africa Oil Refinery in Lamu.

The consumer lobby wants the government to disclose documents showing how the multibillion-shilling project was approved, the procurement process used and the government agency authorised to enter into the proposed arrangement with Dangote Industries.

COFEK filed the petition under Section 75 of the Public Private Partnerships Act, 2021, asking the committee to scrutinise the project’s proposed public equity, land arrangements and other forms of government support.

COFEK questions Ksh65 billion stake

One of the key issues raised by COFEK is Kenya’s proposed 10% stake in the refinery.

The stake has been reported to be worth approximately USD500 million, equivalent to about Ksh65 billion. COFEK wants clarification on how the government intends to acquire the stake and whether the reported amount has been budgeted, committed or already disbursed.

The consumer organisation is also seeking details on the proposed acquisition vehicle, share class and payment arrangements.

The petition seeks to establish the extent of Kenya’s financial commitment before the project progresses further.

Questions over Ksh21.5 billion allocation

COFEK has also questioned a reported Ksh21.5 billion seed allocation associated with the refinery project.

The organisation wants the committee to establish whether the amount is simply an allocation in the national budget or whether the funds have been formally committed or paid.

It is also seeking details on other possible government commitments that could create future financial obligations for taxpayers.

These include potential fuel offtake arrangements, market protections and electricity commitments.

COFEK wants the government to clarify whether any such arrangements have been agreed upon and what their financial implications would be for consumers and taxpayers.

Land contribution under scrutiny

The consumer lobby has further asked for detailed information on approximately 7,000 acres associated with the refinery project.

The petition seeks the specific land parcels involved, their ownership and tenure status, valuation and whether the land will form part of Kenya’s contribution to the project.

The land issue has attracted additional attention because of a separate legal dispute involving residents of Chandavai in Lamu.

About 133 residents have challenged the use of land identified as LR No. 13061 in the Hindi/Manda Magogoni area for the refinery.

The residents have raised concerns over alleged ancestral interests in the land, compensation and the process through which the property was acquired.

The Malindi Environment and Land Court has ordered parties to maintain the status quo on the disputed parcel as the case proceeds.

The government has maintained that the contested land belongs to it and forms part of the Lamu Special Economic Zone.

Ruto, Dangote launch refinery project

COFEK’s petition comes days after President William Ruto and Dangote Industries founder Aliko Dangote presided over the groundbreaking ceremony for the refinery in Lamu on September 30.

The event marked the formal launch of construction of the proposed project, which has been presented as a major investment in Kenya’s energy sector.

The planned Dangote East Africa Oil Refinery is expected to have a processing capacity of 700,000 barrels of crude oil per day.

The project is expected to serve the Kenyan and wider East African markets and has been linked to efforts to strengthen regional fuel supply and energy security.

However, COFEK’s petition has shifted attention to the financial and contractual details behind Kenya’s participation in the project.

The committee will now be required to consider the issues raised by the consumer lobby, including the proposed Ksh65 billion stake, government funding, land arrangements and any other commitments that could have implications for public finances.

The petition comes as construction plans advance and questions continue over how the government will structure its participation in the multibillion-shilling refinery project.

ALSO READ: Counter-Protests Erupt After Pro-Government Supporters Demonstrate at Standard Group HQ

COFEK Seeks Details on Govt’s Ksh65 Billion Stake in Dangote Refinery