Dangote Group has said a Kenyan court order over a land dispute will not stop the planned ground-breaking ceremony for its proposed 700,000-barrel-per-day refinery in Lamu, although some activities at the site could be affected. The Malindi Environment and Land Court ordered both sides in the dispute to maintain the existing “status quo” on the disputed land until a hearing scheduled for October 14.
The court order follows a lawsuit filed by 133 residents of Chandavai in Lamu County, who claim the land earmarked for the refinery is part of their ancestral heritage and that their families have lived and farmed there for generations. The residents' lawsuit has raised concerns about the project's impact on local communities and the environment.
Despite the court order, Dangote Group said the ruling did not cancel the ground-breaking ceremony but acknowledged that it could temporarily restrict activities at the proposed refinery site. The company said it was prepared to deal with those seeking to disrupt the project, which is expected to cost between $15 billion and $16 billion and is targeted for completion by 2030.
Speaking at an investor event in Nairobi, Africa’s richest man, Aliko Dangote, expressed confidence that the project would proceed despite the court action. He described the legal challenge as a normal part of doing business in Africa and said his company was prepared to address the concerns of all stakeholders.
The proposed Lamu refinery is expected to significantly expand Dangote’s refining ambitions beyond Nigeria and could reshape Kenya’s fuel market if completed as planned. The project, however, faces a different operating environment in Kenya, where there is currently no commercial oil production, meaning the future refinery would depend heavily on securing reliable supplies of crude from elsewhere.
The land dispute represents another hurdle for a project already facing questions over crude supply, infrastructure, and financing. Dangote’s expansion into Kenya comes as the conglomerate seeks to strengthen its position across Africa’s energy sector, following the success of its 700,000-barrel-per-day refinery near Lagos, Nigeria, which has helped reduce the country’s dependence on imported petroleum products.
Meanwhile, Dangote’s group launched an initial public offering for its Nigerian refinery earlier this month, described as Africa’s largest-ever share sale, as it seeks to fund its new Kenya refinery through IPO and bonds. The company must now balance its ambitious timetable with a legal dispute over the land on which the refinery is to be built, ahead of the court hearing on October 14.
Key points
- The Kenyan court has ordered a temporary halt to activities on a disputed land where Dangote Group plans to build a $16bn refinery.
- The project is expected to cost between $15 billion and $16 billion and is targeted for completion by 2030.
- The land dispute represents another hurdle for a project already facing questions over crude supply, infrastructure, and financing.
