Omanghana
African industrialist Aliko Dangote has revealed that the estimated cost of his planned oil refinery in Kenya has been reduced to between $15.5 billion and $16 billion, down from the initial projection of $17 billion.
The cost reduction follows lessons learned by the Dangote Group during the construction of its massive refinery in Lagos, Nigeria. The company intends to apply that technical and logistical experience to streamline the development of the Kenyan facility and avoid costly delays.
The proposed refinery, expected to be built on Lamu Island along Kenya’s coast, will have the capacity to process approximately 700,000 barrels of crude oil per day. Construction is scheduled to begin in October 2026, with the company aiming to complete the project in less than four years.
Dangote said the shorter construction period would significantly reduce financing expenses, particularly the interest accumulated on loans during development. The group also expects to avoid the trial-and-error challenges encountered while building its first major refinery in Nigeria.
Financing for the project is expected to consist of 30% equity and 70% debt. Kenya has reportedly allocated KSh21.5 billion in regional government support as seed capital for the development.
Once operational, the Lamu facility is expected to function as an “East African Refinery,” supplying petroleum products to Kenya and neighboring countries. The project could help the region reduce its heavy dependence on imported refined fuels while strengthening energy security and supporting economic growth.
The refinery is also expected to create employment, attract supporting industries and position Kenya as a major petroleum-processing and distribution hub in East Africa.
Source: Omanghana
