Dangote to Build Africa's Second-Largest Oil Refinery on Kenyan Island

Nigerian billionaire and business magnate Aliko Dangote has confirmed the site of his next oil refinery: Lamu island, off the Kenyan coast. The planned facility would have a production capacity of 700,000 barrels per day — enough to make it Africa's second-largest refinery — and could reshape energy supply across East Africa.

Scale and financing

Dangote Industries Limited has not yet announced a final cost figure, but Bloomberg reports put the price tag at up to $17 billion, which would make it one of the largest privately financed infrastructure projects in African history. The company intends to finance the project through a combination of retained earnings and proceeds from a planned IPO of Dangote Petroleum Refinery, though Nigeria's securities regulator says it has not received or approved any such application.

• Planned capacity: 700,000 barrels/day
• Would become Africa's second-largest refinery
• Estimated cost: up to $17 billion
• Construction timeline: 3-5 years
• Geotechnical surveys and engineering work already underway

Economic ambitions and political stakes

Experts note the refinery could drastically reduce East Africa's dependence on imported refined fuels, improve energy security for the wider East African Community, and create thousands of jobs. Kenya's President William Ruto has met Dangote multiple times; analysts suggest the project carries political significance for Ruto's 2026 re-election campaign, as coastal constituencies are expected to be key swing districts.

"It is wonderful to see African-led investments being made on the continent that are also forward-looking." — Oge Onubogu, Center for Strategic and International Studies

Environmental concerns and fossil-fuel debate

The planned site sits near Lamu Old Town, a UNESCO World Heritage Site. Environmental groups warn of potential damage to the historic town and surrounding marine ecosystems — echoing concerns about pollution from Nigeria's Niger Delta, where decades of oil exploration have caused severe environmental harm. Critics also question whether a major fossil fuel facility aligns with Kenya's broader energy transition: over 90% of the country's electricity is already from renewable sources.