Dangote offers East Africa nations 30% stake in new refinery

Dangote Group has offered East African countries a 30% equity stake in the giant refinery planned for the region, according to Kenyan President William Ruto’s top economic adviser.

Kenya’s 10% stake would be worth about $500 million, David Ndii told a capital markets forum in Nairobi late on Thursday, adding that Ethiopia and Rwanda have already shown interest.

“The total for the region is about $1.5 billion,” he said. “I don’t actually see a challenge in doing that, and if some of them are not off-taking we will backstop.”

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Aliko Dangote, Africa’s richest man, plans to build a replica of his 700 000 barrel-a-day Nigerian facility in Kenya. He expects the new facility will cost as much as $16 billion.

Groundbreaking for the petrochemical complex is expected in September, and the cost for the facility and additional ports infrastructure will be about $20 billion, according to Ndii. The refinery will receive about 600 000 barrels of crude per day from oil fields in Uganda and Kenya, he added.

Uganda is undecided about investing in the Kenyan refinery as it already has plans for its own facility, Ndii said. In addition to the 60,000-barrel-per-day facility alongside Alpha MBM Investments of the UAE, Uganda has also agreed to invest in an oil hub on the Tanzanian coast, jointly with its neighbour and Vitol Bahrain.

The Kenyan project will inject about $4 billion of investment annually, according to Ndii. That and several other big-ticket industrial projects already in the pipeline will contribute as much as 10% of gross domestic product, he said.

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