Dangote Refinery Underwrites $1bn Programme as Lamu Project Gains Regional Backing
Dangote Petroleum Refinery has completed a $1 billion (about KES 130 billion) underwriting programme linked to its planned global initial public offering (IPO) and the proposed construction of a 700,000-barrel-per-day refinery in Lamu, Kenya, according to reports in The Standard.
The Lamu project, which would become East Africa’s largest refinery and Africa’s second-largest after Dangote’s 650,000-barrel-per-day facility in Lagos, is estimated to require between $15.5 billion and $16 billion. The financing structure is expected to comprise 30% equity and 70% debt, while the Kenyan government has earmarked KES 21.5 billion as seed capital.
David Ndii, Kenya’s presidential adviser on economic matters, said East African countries had been offered a combined 30% stake in the Dangote refinery, with Kenya expected to commit $500 million, equivalent to roughly 10% equity. The total regional contribution is projected at $1.5 billion. Ndii disclosed the arrangement during Mwango Capital’s Market Forum.
The proposed investment comes as Kenya and other East African economies seek to reduce their exposure to imported refined petroleum products. The region remains heavily dependent on external supply, leaving fuel costs vulnerable to international crude prices, freight expenses and foreign-exchange pressures.
Dangote’s Lagos refinery has already demonstrated the potential scale of privately led refining in Africa, having begun operations amid efforts by Nigeria to reduce dependence on imported fuels. The Lamu facility could similarly reshape East Africa’s downstream petroleum market by supplying Kenya and neighbouring countries.
Beyond energy security, proponents expect the project to generate about 60,000 jobs and stimulate infrastructure, logistics and industrial activity around Lamu. If financing and approvals progress as planned, the refinery could become a major regional energy hub while giving Dangote a larger foothold in Africa’s downstream petroleum industry.