Dangote unveils funding plan for $17 billion Kenya refinery set to become Africa’s second largest

Africa's richest man, Aliko Dangote, has unveiled how he plans to finance his proposed refinery in Kenya, offering fresh details about one of the continent's most ambitious energy projects.

• Aliko Dangote plans to build a 700,000-bpd refinery in Kenya, aiming to create East Africa's largest and Africa's second-largest refinery.
• The project is expected to cost up to $17 billion and will be financed through cash flow, bonds, and a planned IPO.
• The refinery will be located on Lamu Island, with site selection, soil testing, and design work already underway.
• This marks Dangote Industries' biggest refining investment outside Nigeria, reinforcing Kenya as a strategic energy hub for East Africa.

The planned 700,000-barrel-per-day (bpd) facility is expected to become East Africa's largest refinery and, once completed, could rank as Africa's second-largest refinery by nameplate capacity, reinforcing Dangote's drive to expand fuel-processing capacity beyond Nigeria.

The latest update comes as Bloomberg reported that the refinery will cost as much as $17 billion, making it one of the biggest private industrial investments ever proposed in East Africa.

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The report added that Dangote personally pledged to the presidents of Kenya and Uganda that he would build a replica of his flagship Lagos refinery along Kenya's coast.

Financing to come from cash flow, bonds and IPO

Providing further details on the project, Reuters reported that Dangote Industries plans to finance the refinery through a combination of internally generated cash, bonds and proceeds from the planned initial public offering (IPO) of the Dangote Petroleum Refinery.

The proposed listing has attracted significant investor interest since Dangote announced plans to float a stake in the refinery, although no official offer has yet been launched and Nigeria's Securities and Exchange Commission recently clarified that it has not received or approved an IPO application

Citing Dangote Industries' Vice President for Oil and Gas, Edwin Devakumar, Reuters said the refinery will be built on Lamu Island, where the site has already been selected, soil testing is underway and design and engineering work have commenced.

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"The site has been selected, soil tests are under way, and design and engineering work has commenced. Kenya was the choice from the beginning," Devakumar told Reuters.

Reuters reported that Devakumar did not disclose an official budget for the refinery, but said the project would be comparable in scale to the company's flagship Lagos refinery, highlighting the size of what is expected to become Dangote Group's biggest refining investment outside Nigeria.

The company had previously considered Tanzania's port city of Tanga before selecting Kenya, citing infrastructure, logistics and market considerations.

A new refining powerhouse for East Africa

The refinery is expected to take between three and five years to complete, according to Reuters and Bloomberg, and will supply refined petroleum products to Kenya and neighbouring countries, reducing East Africa's reliance on imported fuels.

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The project marks Dangote's biggest refining investment outside Nigeria and builds on the success of the Dangote Refinery in Lagos, which has transformed Nigeria into a growing exporter of refined petroleum products across Africa and globally.

If completed at its planned 700,000-bpd capacity, the Kenyan refinery would become Africa's second-largest refinery by nameplate capacity, assuming the Lagos refinery reaches its planned expansion to 1.4 million bpd.

The investment would also cement Kenya's position as a strategic refining hub for East Africa while expanding Dangote's footprint in Africa's energy infrastructure.