Dangote Breaks Ground on $16 Billion Kenya Refinery in Major East Africa Energy Bet

NAIROBI/LAMU —Nigerian industrialist Aliko Dangote has broken ground on a planned $16 billion oil refinery in Kenya, setting in motion one of the largest industrial investments ever proposed for East Africa and potentially reshaping the region’s fuel supply chain.

The refinery, planned for the port city of Lamu, is designed to process about 700,000 barrels of crude oil per day. Dangote Group expects the facility to serve markets across East Africa, where countries remain heavily dependent on imported refined petroleum products.

Regional governments have been offered a combined 30% stake in the project, while the refinery is eventually expected to list shares on the Nairobi Securities Exchange. Engineers India Limited has been awarded a $450 million engineering contract, while U.S.-based Honeywell Technologies will provide technology and engineering support.

The project also includes plans for a 1,000-megawatt power plant, with excess electricity expected to be sold beyond the refinery complex.

If completed as planned, the refinery could become a major piece of East Africa’s emerging energy infrastructure, serving a market extending from Ethiopia through Kenya and Uganda to other countries in the region. Kenyan officials are also positioning the investment as a catalyst for petrochemicals, bitumen, base oils, logistics and associated manufacturing.

But execution risks remain. Questions persist over crude supply, supporting infrastructure, environmental impact and land rights. Kenya’s High Court has ordered parts of the proposed site preserved while a case brought by residents proceeds.

For investors, the significance extends beyond refining. The project reflects a broader push to process more African raw materials on the continent rather than exporting commodities and importing higher-value finished products.