Kenya has formally broken ground on the proposed Dangote East Africa Petroleum Refinery in Lamu county, marking the start of a project valued at KSh 2.2 trillion with a planned processing capacity of 700,000 barrels of crude oil per day. The ceremony, held on Wednesday, September 30, at Mokowe, was attended by President William Ruto, Uganda's Yoweri Museveni, Ethiopian prime minister Abiy Ahmed, Beninese head of state Romuald Wadagni, Togolese president Jean-Lucien Savi de Tové, and former Nigerian president Olusegun Obasanjo.
Burundi, South Sudan, Rwanda, Botswana, and Tanzania sent official delegations to the ceremony. Aliko Dangote, president of the Dangote Group, told attendees that more than 110 pieces of equipment are already on site, with a further 400 due to arrive within 60 days. He revealed that the project had its origins in an unexpected sequence of events, beginning with a meeting in April during which Ruto sent a representative to discuss fertiliser imports from his group.
Dangote added that an initial plan to site the refinery in Tanga was later revised following research, with Lamu ultimately selected. Dangote also pledged to establish a training school in Lamu ahead of full operations, promising to guarantee employment for up to 1,000 residents holding engineering degrees or diplomas. He acknowledged that challenges lie ahead, including a legal challenge filed the previous day, but said the group was undeterred.
President Ruto reiterated his remarks that the refinery would be completed within 40 months, adding that Kenyans hold their leaders accountable to timelines. Ruto's comments come amid concerns over the project's timeline and potential hurdles. The refinery is expected to have a significant impact on Kenya's economy and energy sector.
However, not everyone is convinced about the project's transparency. Kiharu MP Ndindi Nyoro publicly raised a series of questions about the deal's terms, including the identity of shareholders in the Kenyan subsidiary, Dangote East African Refinery, the extent of land being ceded and whether it converts to equity, Kenya's direct financial commitments, and whether any off-take agreements contain "take or pay" provisions.
Nyoro also questioned whether any public land or government investments would be converted into private shareholding in the refinery and called on the government to publish full details of the agreements signed. Dangote confirmed that formal agreements were signed on Tuesday, the day before the groundbreaking ceremony. The project has sparked debate and raised concerns among some Kenyans.
In other news, Dangote proposed to sell Kenya 500 megawatts of electricity from a planned power plant in Lamu. The offer is part of a larger refinery project, with negotiations involving Kenya Power still under way. Key details, including electricity prices, fuel supply, and financing, have yet to be agreed. The project is set to move forward, with construction expected to begin in the coming months.
Key points
- The Dangote East Africa Oil Refinery project is valued at KSh 2.2 trillion and has a planned processing capacity of 700,000 barrels of crude oil per day.
