Kenya to Buy Stake in $16bn Dangote Lamu Refinery

Kenya's government plans to invest in the proposed $16 billion Lamu oil refinery through its National Infrastructure Fund, President William Ruto announced at the project's groundbreaking ceremony in Lamu on Wednesday, opening a new financing model for one of East Africa's largest planned industrial projects.

"We are going to use the National Infrastructure Fund to invest in this refinery," Ruto said, adding that the government would deploy state assets, including land, alongside the fund to take a stake in the facility being developed by Nigerian billionaire Aliko Dangote.

Ruto said the government could not finance every major road, railway, port, energy project and industrial undertaking through taxes and public debt. "Our task is no longer to simply ask how much government can spend.

Our measure is how much investment every shilling of government or public capital can mobilise from the private sector, pension funds, insurance companies and other long-term assets," he said.

Nairobi bourse listing to widen local ownership

The government's planned stake will sit alongside a separate opportunity for ordinary Kenyans to buy shares in the refinery through the Nairobi Securities Exchange, an arrangement Dangote said would broaden local ownership of the project. Dangote said the refinery would bring together African capital, Kenyan talent and global technology, with the facility expected to process about 700,000 barrels of crude oil a day, generate up to 1,000 megawatts of electricity, produce one million tonnes of polypropylene annually, and include base-oil production.

The financing structure marks a departure from the more common approach in which large African infrastructure projects are funded primarily through government borrowing or direct public expenditure.

Refinery designed to anchor a wider industrial complex

The facility is planned to process crude from Kenya's Turkana oilfields, alongside supplies from other parts of Africa, and is intended to reduce the region's dependence on imported petroleum products. Ruto said Kenya currently spends about KSh530 billion ($4.08 billion) a year importing petroleum products, underscoring the scale of the domestic market the refinery could serve.

Beyond fuel supply, the refinery is being positioned as the anchor for a wider industrial complex around Lamu, encompassing power generation, petrochemicals, manufacturing, logistics and engineering services. Ruto said the project would give Lamu Port and the Lamu Port South Sudan Ethiopia Transport (LAPSSET) corridor an economic anchor by generating demand for transporters, contractors, engineers, manufacturers and other service providers, positioning the project around both domestic supply and a wider regional market.

Other investors have also expressed interest n

The government's move follows earlier interest from private investors elsewhere in the region. Nairametrics reported in July that Tanzanian billionaire Mohammed Dewji had expressed interest in investing $100 million in the refinery, despite saying he would have preferred the project to be based in Tanzania.

"I would lean more toward Tanzania than in Kenya," Dewji said at the time, adding that discussions with Dangote had not yet begun but that he intended to initiate talks. "Definitely reach out to him and we can chat about it," he said.

How much of the $16 billion project's financing the National Infrastructure Fund and the planned share listing ultimately cover, alongside any additional private investment from figures such as Dewji, will shape how much of the funding gap remains as construction moves forward.