As the Dangote Group nears the opening bell for its Nigerian refinery’s IPO, plans to build a similar plant in Kenya are under the spotlight because of an array of potential challenges.
The massive refinery in Lagos state has sourced crude oil from within Nigeria as well as international markets. But it remains unclear where the planned refinery in Lamu, which Dangote aims to complete by 2030, will secure its feedstock from: Kenya imports nearly all of its oil from the Middle East. A Dangote Industries executive told Reuters that the company does not foresee challenges with securing crude for the project.
Meanwhile, fundraising for the $16 billion Kenya project “could become a formidable challenge,” an analyst said, given Dangote’s concurrent plans to double the Lagos refinery’s capacity. But Aliko Dangote, the billionaire tycoon behind the refineries, has benefited from the global diesel refining crunch since the US-Iran war started, telling Bloomberg he felt “extremely bullish” about margins over the medium term.