Dangote’s planned Kenya refinery to cost $17 billion, take five years to build

The proposed oil refinery to be developed by the Dangote Group on Kenya’s coast will cost an estimated $17 billion and take about five years to complete, according to a spokesperson for Dangote Industries Ltd.

The development was reported by Bloomberg on Tuesday, citing a spokesperson for the company, who confirmed the project’s estimated cost and construction timeline.

The planned refinery is expected to replicate the scale and design of the Dangote Refinery in Lagos, Nigeria, which currently ranks as Africa’s largest single-train refinery and one of the biggest in the world.

What they are saying

The latest details build on commitments made earlier this year by Africa’s richest man, Aliko Dangote, during a panel session at the Africa Finance Corporation (AFC) Summit held in Nairobi in April.

Speaking before Kenyan President William Ruto and Ugandan President Yoweri Museveni, Dangote said his company was prepared to replicate the size and capacity of its Lagos refinery in East Africa through a regional partnership.

• “We are discussing that we are going to have a joint refinery in Tanga to benefit all of us,” he said.

Dangote also pledged to lead the execution of the project and expressed confidence that it could be delivered within a relatively short timeframe.

• “My commitment today here is that we will lead the refinery. We’ll make sure that the refinery is built within the next four to five years.”

Although the project was initially expected to be located in Tanga, Tanzania, plans later shifted to Lamu, a coastal town in southeastern Kenya, which Dangote said was selected for commercial and technical reasons.

The regional ambition was further reinforced in May when Ugandan President Yoweri Museveni disclosed that he had held discussions with Dangote on the project, linking it to Uganda’s broader energy strategy.

According to Museveni, Uganda deliberately delayed commercial oil production because it considered domestic refining a strategic priority before exporting crude oil.

• “That is why Uganda delayed oil production because we insisted on first having a refinery. Without refining our oil, it would not make economic or strategic sense to simply export crude oil while others benefit from the finished products.”

More insights

The proposed Kenyan refinery is expected to become one of Africa’s largest crude-processing facilities upon completion, underscoring a growing push by African countries to increase domestic refining capacity and reduce dependence on imported petroleum products.

• Its design is expected to mirror the Dangote Refinery in Lagos, which is already transforming Nigeria’s downstream petroleum sector. The Nigerian facility recently reached full operational capacity, significantly reducing Nigeria’s reliance on imported fuel after years of heavy import dependence.
• The refinery has also reversed a long-standing decline in Africa’s refining capacity. Before the Dangote plant came on stream, the continent had witnessed decades of shrinking refining infrastructure despite accounting for a significant share of global crude oil production.

Its success has encouraged several African countries to pursue similar projects. Mozambique is considering a proposed 200,000-barrel-per-day refinery backed by Nigerian businessman Benedict Peters, while Uganda plans to develop a 60,000-barrel-per-day refinery to meet domestic demand and supply neighbouring markets around Kenya and Tanzania.

What you should know

Dangote’s latest East African refinery ambitions come as the company continues an aggressive expansion of its flagship refinery complex in Lagos.

• The refinery currently processes around 650,000 barrels of crude oil per day, but plans are underway to more than double its capacity to approximately 1.4 million barrels daily over the next few years. If completed as planned, the expansion would make the facility one of the world’s largest refining complexes.
• To finance the expansion, the African Export-Import Bank (Afreximbank) is backing $2.5 billion of a broader $4 billion syndicated term loan, providing critical funding for the next phase of development.
• The Dangote Group has also strengthened its construction programme by signing a $400 million agreement with Chinese equipment manufacturer XCMG Construction Machinery earlier this year to accelerate work across the refinery complex.

Beyond refining petroleum products, the expansion is expected to significantly increase the refinery’s petrochemical output. Annual polypropylene production is projected to rise from about 900,000 metric tonnes to roughly 2.4 million metric tonnes, reinforcing the refinery’s importance to Africa’s manufacturing and industrial value chain.