Dangote to Break Ground on $16bn Kenya Refinery November 1

Aliko Dangote and Kenya's President William Ruto will break ground on a $16bn (£12bn) oil refinery in Lamu, on Kenya's northern coast, with construction due to begin on 1 November.

The facility is expected to process 700,000 barrels of crude oil a day once complete, making it East Africa's largest industrial project by capacity. It is Kenya's largest infrastructure project since independence, surpassing the $5.1bn (£3.9bn) Standard Gauge Railway. East Africa currently has no oil refineries at all.

The launch has not been without friction. Ahead of the ceremony, some local residents took to the streets to demand more compensation for land used for the refinery. Dangote dismissed the protests in an interview with the BBC's Focus on Africa programme, calling them games played by local marketers and international players. He insisted the project would go ahead and be ready by 2030 as planned.

Dangote disputed the compensation claims, saying his company took only the portion of land it needed from what the government made available.

"To come and say some people are demonstrating, demonstrating about what? Have you ever seen people demonstrating against themselves in terms of development?" he said.

60,000 jobs at peak construction

At the height of construction, the refinery would create 60,000 jobs, Dangote said, with benefits extending beyond those employed directly by the project.

"Are we going to bring robots? Of course, the people will benefit," he said.

Critics have questioned the decision to build the refinery in Kenya, which produces no oil. Some have argued for Tanzania or Uganda instead — both countries are moving towards oil exports through the East African Crude Oil Pipeline. Kenya's Energy and Petroleum Minister Opiyo Wandayi rejected the concern, telling the BBC the refinery's location does not mean it will depend on regional oil supplies.

"Refineries get crude oil from the market. And the market is open," Wandayi said.

Dangote made the same argument and cited a precedent.

"Singapore doesn't produce a single drop of oil, yet they have a lot of refineries," Dangote said.

A 1,000MW power plant attached

The Lamu complex will also include a 1,000-megawatt power plant. Dangote views reliable electricity as a critical constraint on industrialisation across Africa, particularly in mineral-rich countries that still export raw materials rather than processing them locally.

In Lamu, the new plant is designed to power Dangote's operations as well as other industries expected to set up in the area.

"The power is there and what you do is what we call plug and play," he said.

Dangote has roughly $50bn (£38bn) worth of projects in the pipeline. They include plans to develop 10,000 megawatts of power generation capacity across Africa by 2030, with the potential to double that depending on demand.

For Kenyan consumers, greater refining capacity could eventually ease pump prices, which are relatively high in the country. The price of crude oil — the main raw material for fuel — is set by international markets, however, and remains a major factor in what consumers pay at the pump.

Largest investment outside Nigeria

The Lamu refinery is Dangote's largest proposed investment outside Nigeria. His refinery in Nigeria, like the planned Lamu facility, has a processing capacity of 700,000 barrels a day. Dangote plans to double that capacity after floating 4.1 million ordinary shares earlier this month to raise up to $2.1bn.

If Lamu stays on its 2030 timeline, East Africa's first refinery would begin processing crude the same year Dangote aims to complete his 10,000-megawatt power build-out — a pairing that would test his thesis that energy supply, not oil reserves, determines where African industry takes root.