Key takeaways:
- Ethiopia has expressed interest in taking an equity stake in Dangote’s planned Lamu refinery in Kenya
- Dangote Group has offered a combined 30% stake to East African countries
- The proposed refinery is expected to cost $16 billion to $17 billion
Ethiopia is among East African countries that have expressed interest in taking an equity stake in a planned multibillion-dollar oil refinery in Kenya being developed by Nigerian billionaire Aliko Dangote.
Dangote Group has offered East African countries a combined 30% stake in the proposed refinery. Kenya is expected to take a 10% share worth about $500 million, David Ndii, economic adviser to Kenyan President William Ruto, said at a capital markets forum in Nairobi.
Ethiopia and Rwanda have also shown interest, potentially bringing the regional investment to about $1.5 billion.
Ndii said participating countries that do not commit to purchasing the refinery’s output could have their positions “backstopped,” a mechanism intended to protect their equity stake even if they are unable to guarantee offtake volumes.
A refinery designed to serve the wider region
The proposed refinery in Lamu is expected to have a processing capacity of up to 700,000 barrels of crude oil per day and cost about $16 billion to $17 billion.
Including associated port infrastructure, the wider project could reach approximately $20 billion.
The refinery is expected to process crude from oil fields in Kenya and Uganda and supply petroleum products to markets across East Africa, positioning it as a regional supply hub rather than a facility serving Kenya alone.
The project follows Dangote’s development of a 650,000-barrel-per-day refinery in Nigeria and represents the group’s planned expansion of its refining operations into East Africa.
Dangote has said groundbreaking for the Lamu facility is expected before the end of 2026.
Part of a broader energy push for Ethiopia
For Ethiopia, the potential participation comes as the country develops a series of energy and infrastructure projects involving Dangote and other regional partners.
Ethiopia’s interest in the Lamu refinery would add to its expanding portfolio of cross-border energy investments, reflecting a broader push by East African governments to secure equity positions in regional infrastructure rather than relying solely on imported refined products.
