Construction has started on Aliko Dangote’s $16bn (R261.3bn) oil refinery in Kenya. The Nigerian billionaire and President William Ruto broke ground at Lamu on the Indian Ocean coast on 30 September. The presidents of Ethiopia and Uganda attended the ceremony for what Ruto called the largest foreign direct investment in Kenya’s history.
The plant is designed to process 700,000 barrels a day, more than any refinery in Europe, and is scheduled for completion in 2030. Dangote has offered regional governments a combined 30% stake. Investors including Kenya and Rwanda will be able to pay for their shares over four years, and the refinery will eventually list on the Nairobi Securities Exchange.
Ruto said the project would add 12% to Kenya’s annual GDP and create about 60,000 jobs. The complex will include a 1,000MW power plant fuelled by petroleum coke, with half its output going to the Kenyan grid. Honeywell will provide the refining technology.
| Project detail | Figure |
|---|---|
| Estimated cost | $16bn (R261.3bn) |
| Refining capacity | 700,000 barrels a day |
| Target completion | 2030 |
| Stake offered to regional governments | 30% |
| On-site power plant | 1,000MW |
| Site size | About 7,000 acres |
| Kenya’s 2025 fuel import bill | KSh575.5bn (R72.6bn) |
Kenya has imported all its refined fuel since its only refinery in Mombasa closed in 2013. Domestic demand for petroleum products rose 9.9% to 5.7m tonnes in 2025, according to the Kenya National Bureau of Statistics. The import bill fell to KSh575.5bn (R72.6bn) from KSh628.8bn (R79.4bn) in 2024, as crude prices eased. The Middle East conflict has since pushed costs up again. In May, monthly fuel imports reached a record KSh122.35bn (R15.4bn), the first month in which fuel overtook industrial supplies as Kenya’s largest import category.
Kenya buys most of its fuel from Saudi Arabia and the United Arab Emirates under government-to-government deals that give it 180 days to pay. Dangote said the Lamu plant would take crude from regional producers, including Kenya once it starts pumping oil, as well as from the Middle East and the US. He also plans to export jet fuel to Europe and the UK. East African countries are only beginning to develop their own reserves, so where the plant’s crude will come from remains an open question.
The project faces a legal challenge. A group of 133 farmers and residents from the Chandavai and Magogoni areas say officials and developers cleared land on 10 September without notice. They claim the clearing destroyed homes, crops, mosques and graves. A court order dated 25 September preserves parts of the site until a hearing in October, but did not stop the ceremony. Greenpeace and other environmental groups have also objected.
The refinery will compete with planned projects in Tanzania and Uganda. Dangote chose Lamu over Mombasa and Tanzania, saying it offered deeper water and firmer land.
The Kenyan launch follows the initial public offering of Dangote’s Nigerian refinery in Lagos two weeks ago, with a Nairobi listing planned for December. Dangote told investors in Nairobi that his group had already invested more than $25bn (R408.3bn) and planned to commit a further $50bn (R816.5bn).