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Aliko Dangote began construction of a $16 billion oil refinery at Lamu on Kenya's coast on Wednesday, Sept. 30, with President William Ruto at the ceremony.
The plant is designed to process 700,000 barrels of crude a day, which would make it the largest refinery in East Africa and the second largest in Africa after the one Dangote built at Lekki in Lagos. He is developing it with the Africa Finance Corporation, the multilateral infrastructure investor, and Kenya's government expects it to create around 60,000 jobs.
Nobody agrees on what it costs. Reuters puts it at $16 billion, the Kenyan government has used 2.2 trillion shillings, about $17 billion, and Dangote himself has cited $20 billion. The gap turns on whether port infrastructure is counted.
About 70% of the money is being borrowed, roughly 1.45 trillion shillings, with the rest raised as equity.
Dangote has offered Kenya more than fuel. He told Ruto in Lagos on Friday that the complex will include a 1,000 megawatt power plant, and that he would sell half that electricity to the Kenyan government.
Two challenges reached court and the streets before the machinery did. A hundred and thirty-three residents of Chandavai in Lamu sued the government, the LAPSSET Corridor Development Authority, Lamu County and Dangote Industries on Monday, saying they were pushed off ancestral land without compensation and that officers cleared one of the disputed parcels on Sept. 10 and told them it would host this ceremony. Justice Jane Onyango at the Malindi Environment and Land Court declined to certify the application as urgent, refused to stop the groundbreaking, and issued a status quo order running to Oct. 14.
Dangote Group said the ruling would not halt the launch but might affect activities at the site.
Ndindi Nyoro, who leads the People's Party of Kenya, separately demanded on Saturday that the government publish the names of everyone who will own a share of the refinery.
The commercial question is crude. The plant needs regional production above 600,000 barrels a day to run at capacity, against projections of 350,000 from South Sudan, 250,000 from Uganda and 120,000 from Kenya, whose own output is expected to begin towards the end of this year. Ruto told Dangote that Kenya is working on a route to move oil from the Turkana fields to Lamu.
The refinery is meant to supply Kenya, Uganda, South Sudan, Rwanda, Burundi and the Democratic Republic of Congo, which together import almost all their fuel.
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