Dangote Group Proposes Regional Stake in Planned Lamu Refinery Project

A proposed refinery project in Kenya’s Lamu County is expected to cost about KSh2 trillion, with the Dangote Group reportedly considering giving countries in the East African region a stake in the venture.

FCPA Hesbon Omollo said the project could cost roughly KSh2 trillion or slightly more, while noting that the host country would also be required to provide land and supporting infrastructure.

According to Omollo, the proposal would involve allocating about 30 per cent of the project’s stake to countries within the East African region.

Kenya Could Take 10% Stake

Omollo said Kenya taking a 10 per cent stake had been proposed, although no agreement had been reached on the matter.

“Dangote has offered to give about 30 percent of the stake to the countries within the East African region, Kenya taking up 10 percent was a proposal, not yet agreed upon,” Omollo said.

The proposed regional participation would give neighbouring countries an opportunity to invest in the project and potentially benefit from its operations.

Host Country Expected to Provide Infrastructure

Omollo said the project would also require significant support from the host government, including land and infrastructure around the proposed site.

He said the commitment would include access to Lamu Port and other infrastructure needed to support the refinery and its operations.

“The project has a commitment that the host country as a government must be able to give in terms of the land and all the things, infrastructure around that place, access to the Lamu Port and all the rest around that space,” he said.

The involvement of Lamu Port would potentially provide the refinery with access to an important maritime gateway for importing crude and other materials while facilitating the movement of petroleum products.

Refinery Would Rely on Imported Crude

Omollo also pointed to the experience of Dangote’s refinery in Lekki, Nigeria, noting that only a portion of the crude used by the facility is supplied domestically, with the remainder imported.

“Even in Lekki, Nigeria only gives about 17 percent of crude oil to that project, the rest is imported, about 80-something percent,” he said.

The comparison highlights the potential importance of reliable crude supply arrangements for a refinery project in Kenya.

Regional Investment Opportunity

If the proposal proceeds, the planned project could become a major investment in Kenya’s energy and infrastructure sector while creating an opportunity for regional governments and investors to participate in the venture.

However, Omollo’s remarks indicate that key elements, including Kenya’s proposed 10 per cent stake, remain subject to negotiations and have not yet been formally agreed upon.