Kenya: Aliko Dangote reduces the cost of his refinery and plans to start construction in October.

The project is expected to increase regional refining capacities and reduce East Africa’s dependence on imported refined petroleum products. According to available information, the future facility would supply the Kenyan market as well as several other countries in the region.

Construction is set to begin in October 2026, according to the schedule provided by the Nigerian businessman. However, the actual start of work will depend on the completion of various administrative, technical, and financial stages related to the project.

A capacity of 700,000 barrels per day

With an announced capacity of 700,000 barrels of crude oil per day, the Lamu refinery would be among the largest hydrocarbon processing infrastructures on the continent. The project aims to produce fuels locally, primarily for Kenya, while also opening the possibility of supplying neighboring markets.

The projected investment amount has been reduced from about 17 to 16 billion dollars. Available information does not specify the factors that enabled this reduction or the financing structure chosen for the realization of the infrastructure.

Lamu is already hosting projects related to oil transportation and logistics, particularly as part of the Lamu-Port-South Sudan-Ethiopia transport corridor. The presence of a refinery in this area could strengthen the port’s role in the energy supply for Kenya and the landlocked countries of East Africa.

Kenya currently imports a large portion of the petroleum products consumed in its market. Establishing regional refining capacities would, if the project succeeds, limit the exposure of East African economies to freight costs, tensions in international markets, and fluctuations in refined product prices.