Dangote Group has reportedly opened an opportunity for East African countries to invest in the proposed refinery, which is expected to be built on Lamu Island at an estimated cost of between $16 billion and $20 billion.
According to Nigeria’s Arise News, the project is expected to process petroleum products for distribution across East Africa.
Besides Rwanda, Kenya and Ethiopia have also expressed interest in participating in the project, which was recently discussed by Kenyan President William Ruto’s special economic adviser, David Ndii.
Ndii said Kenya has committed to acquiring a 10% stake in the project, valued at $500 million, from the 30% share that Dangote has reportedly set aside for East African countries.
Under the proposed arrangement, East African investors would collectively be expected to contribute at least $1.5 billion.
“The total regional investment will be $1.5 billion. I see no reason to hesitate, and if others in the region do not take up the opportunity, we will support it,” Ndii said.
The proposed refinery is expected to have a capacity comparable to the Dangote Petroleum Refinery in Lagos, Nigeria, which can process about 700,000 barrels of crude oil per day.
According to Ndii, the wider project could cost close to $20 billion, including investment in supporting infrastructure and port facilities needed to handle petroleum supplies.
He said the official launch of the project is expected in September. The refinery is projected to process more than 600,000 barrels of crude oil per day, with supplies expected to come from Uganda and Kenya.
Uganda has not yet indicated an interest in investing in the project, as it is already pursuing plans to build its own refinery with a processing capacity of about 60,000 barrels per day.
The country is working with Alpha MBM Investments of the United Arab Emirates on the project and is also involved in plans to develop petroleum processing infrastructure on Tanzania’s Indian Ocean coast in partnership with Tanzania and Vitol Bahrain.
The refinery project that Rwanda has expressed interest in is expected to generate economic benefits beyond petroleum processing by boosting investment, regional trade and industrial development.
Kenya, for example, expects the project to contribute about $4 billion annually to its economy.
The project is also expected to support Dangote’s broader ambition of expanding petroleum refining capacity within Africa, reducing dependence on imported refined petroleum products and helping cushion African markets from fluctuations in global fuel prices.
Another expected benefit is deeper regional economic integration, as crude oil from countries such as Uganda and Kenya could have a reliable market within East Africa.
