Ndii Says Dangote-Backed Oil Refinery Set to Break Ground in September

Ndii Says Dangote-Backed Oil Refinery Set to Break Ground in September

Kenya could soon take a major step towards establishing a large-scale oil refining industry after economist and President William Ruto’s economic adviser David Ndii said a proposed Dangote-backed refinery in Lamu is expected to break ground in September.

The planned refinery and petrochemical complex is estimated to cost about Ksh2.59 trillion ($20 billion), making it one of the largest proposed energy projects in Kenya.

Speaking at the Mwango Capital Markets Forum in Nairobi on Thursday, Ndii said the project could attract significant investment from East African countries seeking to secure a stake in the facility.

Kenya has reportedly been offered a 10% equity stake valued at about Ksh64.74 billion ($500 million).

Ethiopia and Rwanda have also expressed interest in participating in the project, potentially bringing the combined East African regional stake to 30%.

“The total for the region is about Ksh194.2 billion ($1.5 billion).”

Ndii said countries that may not be able to commit to purchasing petroleum products from the refinery could still participate through a backstop arrangement.

Dangote Plans Major Investment

The proposed project is expected to involve substantial investment by Nigerian billionaire Aliko Dangote.

Dangote is expected to invest up to Ksh2.07 trillion ($16 billion) in the refinery, according to reports.

The planned facility is expected to be modelled on Dangote’s 700,000-barrel-per-day refinery in Nigeria.

The Kenyan project would also include additional port infrastructure, increasing the overall estimated cost to about $20 billion.

The refinery is expected to serve Kenya and other East African markets by processing crude oil into refined petroleum products for regional consumption.

If completed as planned, the facility could significantly change the region’s petroleum supply chain.

East Africa Has Crude Oil Potential

Ndii said East Africa has enough potential crude oil production to support a major regional refinery.

He estimated the region’s potential crude production at more than 600,000 barrels per day.

South Sudan could contribute about 350,000 barrels per day, while Uganda could provide around 250,000 barrels per day.

Kenya’s potential contribution was estimated at approximately 120,000 barrels per day.

The availability of regional crude supplies could reduce dependence on imported crude and support the development of a regional petroleum value chain.

Dangote Seeks Government Support

The proposed Lamu refinery comes after Dangote called on the Kenyan government to create conditions that would allow the project to compete with imported petroleum products.

The businessman has warned that cheaper fuel from countries such as Russia and India could affect the competitiveness of a locally produced petroleum product.

Dangote has also called for government support through land allocation, regional financing and a clear policy framework.

He has argued that the refinery would require a stable market to support its operations once production begins.

Refinery Could Boost Kenya’s Energy Sector

The proposed refinery is expected to strengthen Kenya’s position as a regional petroleum hub.

The project could also create employment opportunities and support industries linked to petroleum processing, transportation, logistics and manufacturing.

A functioning refinery in Lamu could reduce East Africa’s reliance on imported refined petroleum products while creating a potential export market for Kenya.

Ndii’s latest announcement comes after earlier indications that construction could begin in October 2026.

The project is expected to take less than four years to complete if construction proceeds according to schedule.

Once operational, the facility could have a processing capacity of up to 700,000 barrels of crude oil per day.

However, the project will require substantial financing, regulatory support and regional commitments before construction and operations can proceed.

For Kenya, the proposed refinery represents a major investment opportunity but also a significant infrastructure undertaking.

Its success will depend on securing financing, crude supply, regional markets and government policies that can support the project through construction and eventual production.

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Ndii Says Dangote-Backed Oil Refinery Set to Break Ground in September