Dangote reveals why Ksh.2 trillion oil refinery was moved from Tanga to Lamu

Businessman Aliko Dangote, President of Dangote Group, has explained how the idea for the Ksh.2 trillion refinery planned for Lamu came about, saying discussions on the project began during a meeting in Nairobi before the group settled on the Kenyan coastal town.

Speaking in an exclusive interview with Citizen TV on Tuesday, Dangote said the discussions took place in April, with the group initially considering Tanga in Tanzania as the preferred location because of the planned pipeline connecting Uganda to the Tanzanian port.

He said the initial discussions followed an invitation by the Managing Director of the African Finance Corporation to attend a conference in Nairobi, where President William Ruto also wanted to meet him to discuss the supply of fertilizer on the sidelines of the meeting.

“The MD of the African Finance Corporation was trying to invite me to Nairobi because they had a conference and wanted me to participate. The President also wanted to see me to discuss the supply of fertiliser. That is how it all started,” Dangote said.

“That was in April, and we started discussing how we would do it. At the end of the day, we said, okay, yes, we would do it. At that time, we were all thinking about Tanga because of the pipeline from Uganda into Tanga.”

According to the Nigerian businessman, Lamu was preferred due to its unique natural qualities.

“But later, we realised that the most suitable place to put up the refinery, where there is enough water, sufficient sea depth and good land, is Lamu,” he said.

He said the refinery project was subsequently discussed during the meeting, with Dangote committing his group to the investment after determining that the project was viable.

“We began talking about the refinery…we had already discussed it and agreed that, yes, we would be able to build a refinery. One good thing about our group is that if we see something that is real and good, I can make a commitment on behalf of the board and go back later to clear myself,” he said.

President Ruto is expected to break ground for the refinery on September 30, with the project projected to take up to three years to complete.

The refinery is expected to have a capacity of 700,000 barrels per day and produce more than 100 million litres of petrol, diesel and aviation fuel daily.

It is expected to supply refined petroleum products to Kenya and neighbouring countries, including Ethiopia, South Sudan, Uganda, Tanzania, Rwanda, Burundi and the Democratic Republic of Congo.

The project is also expected to become Dangote Group's biggest refining investment outside Nigeria as the conglomerate expands its energy business across Africa.

Dangote has previously said the refinery will also have a 1,000-megawatt power plant, with about 500 megawatts expected to be available for sale to the Kenyan government.

However, the project has faced opposition from some residents in Lamu, with more than 130 residents of Chandavai moving to court to challenge the development over alleged land acquisition and potential displacement.

The residents have raised concerns over compensation and resettlement as construction preparations get underway.