Dangote Group Unveils Kenya Refinery Funding Plan

Dangote Group has outlined how it intends to finance its proposed 700,000-barrel-per-day oil refinery in Kenya, saying the project will be funded through a combination of internal cash flow, corporate bond issuances and a future initial public offering (IPO). The investment is expected to become East Africa’s largest refining facility once completed.

The refinery will be built on Lamu Island and is designed to strengthen fuel production across the region while reducing dependence on imported petroleum products. Dangote Industries Executive Vice President for Oil and Gas, Edwin Devakumar, said the company has completed site selection, while soil testing, engineering and design work are already underway. He added that construction is expected to take about three years after the project receives final investment approval.

Devakumar did not disclose the estimated cost of the refinery but said it would be comparable to the more than $20 billion invested in the Dangote Refinery in Lagos, which faced years of delays caused by inflation, engineering challenges, currency depreciation and disruptions linked to the COVID-19 pandemic. He said the Kenyan project would be financed using funds generated from the group’s existing operations alongside proceeds from planned bond sales and the future public listing.

The refinery represents Dangote Group’s biggest refining investment outside Nigeria and forms part of its wider strategy to expand energy infrastructure across Africa. The company had also considered Tanzania’s port city of Tanga before selecting Lamu after assessing infrastructure, logistics and regional market opportunities. A final investment decision has not yet been announced.

SOURCE: Reuters