LAMU — This historic Swahili town, long celebrated for its ancient dhows and UNESCO World Heritage charm, is on the cusp of an industrial revolution that will fundamentally alter its economic DNA.
Today (Wednesday), President William Ruto will lead 14 other regional heads of state and Africa’s richest man, Aliko Dangote, in breaking ground for the East African Oil Refinery — a $16 billion (Sh2.2 trillion) behemoth that will become the single largest private-sector investment in Kenya’s history.
The first vessel carrying project cargo, the MV Da Yang Bai He, laden with 2,930.295 metric tonnes of construction equipment from China, docked at Lamu Port’s Berth 3 over the weekend — a symbolic arrival that Kenya Ports Authority MD Captain William Ruto described as firmly establishing the facility’s capacity to handle ultra-large vessels.
The refinery, to be developed by Dangote Group in partnership with the Africa Finance Corporation, will process 700,000 barrels of crude oil per day — making it larger than Dangote’s flagship 650,000-bpd Lekki Refinery in Lagos, Nigeria, and the biggest refining complex in East Africa.
Engineers India Limited has already been awarded a $450 million (about Sh58 billion) contract to oversee construction, having previously managed the Lagos facility.
“We chose Lamu because it’s the best location,” Dangote said on Tuesday. “We have our construction equipment on site. We will try to train many competent people to work in the refinery. This alone will create a new ecosystem of micro businesses around the new refinery.”
The project will be built on Lamu Port-South Sudan-Ethiopia Transport (LAPSSET) land in Lamu, leveraging the deep-water port that was opened in 2021 at a cost of $2.5 billion. Construction is projected to take about three years, with completion targeted for 2030.
Crucially, the Dangote Group has offered a 30 per cent equity stake to East African nations, with Kenya planning to take a 10 per cent shareholding valued at $500 million (about Sh65 billion).
For Lamu county, which has historically lagged behind in industrial development, the refinery represents an economic lifeline.
The project is expected to create 60,000 direct jobs, with thousands more in spin-off industries including fertiliser production, chemicals, and packaging.
Local youth will finally have access to industrial employment opportunities that previously required migration to Mombasa or Nairobi.
The refinery will also anchor the long-dormant LAPSSET Corridor, which Captain Ruto confirmed is already seeing renewed activity.
Road construction in Garissa, Moyale, and the broader northern Kenya corridor is underway, while a dry port is planned for Moyale to serve as an inland container depot.
This will transform Lamu from a quiet fishing and tourism town into a bustling industrial and logistics hub, catalysing growth in Tana River, Garissa and beyond.
For Kenya, the refinery offers a decisive break from a century of dependence on imported refined petroleum products. Once operational, it will supply petrol, diesel, and aviation fuel to Kenya, Uganda, South Sudan, Rwanda, Burundi, Tanzania, Ethiopia, and the Democratic Republic of Congo.
This will reduce the region’s exposure to international fuel price volatility, freight costs, and foreign-exchange pressures.
President Ruto has framed the project as a transformative intervention for the Coast region, which has historically been marginalised.
“On Wednesday (today), we will do the historic groundbreaking in Lamu and this will serve as a testament that the coastal region will not be left behind and the marginalisation that has happened for decades will not continue,” he said.
The head of state spoke during his ongoing Coast tour, in which he has issued nearly 200,000 title deeds across six counties.
The refinery will also generate as much as 1,000MW of electricity, with half dedicated to Kenya’s national grid, significantly boosting industrialisation.
“We will be selling 500MW of power to the government of Kenya,” Dangote said. “For those interested in investment, Lamu is the place to invest. There will be excess power supply plus state-of-the-art amenities. It will be the fastest refinery to be built.”
The refinery is the missing commercial anchor and rocket that LAPSSET has lacked since its inception.
The corridor — comprising a 500-metre-wide infrastructure spine and a 100-kilometre-wide economic zone — was always designed to link landlocked Ethiopia and South Sudan to the sea, but without a major industrial cargo source, the port languished.
Dangote’s refinery changes that calculus entirely. Dangote plans to build pipelines connecting Lamu to Ethiopia and Djibouti to Ethiopia, part of a proposed 4,000-kilometre pipeline network linking landlocked nations.
Crude oil will flow from South Sudan, Uganda, and Kenya’s Lokichar fields in Turkana county, with additional supplies imported through Lamu Port from the Middle East.
This integration will position Kenya as the energy hub of East and Central Africa, earning foreign exchange through refined product exports while reducing the region’s annual fuel import bill by billions of dollars.
“The Dangote refinery gives us an opportunity to write a different story. It is one of the most consequential industrial events ever undertaken in Kenya, East Africa and Africa,” said Nairobi Security Exchange CEO Frank Mwiti.
Aliko Dangote, 69, is Africa’s richest person with a net worth of $35.5 billion on the Bloomberg Billionaires Index.
His Dangote Group is a sprawling conglomerate with interests spanning cement, sugar, salt, flour, fertiliser, and petroleum. His flagship 650,000-bpd Lekki Refinery, which began operations in 2024 following a $20 billion investment, is already transforming Nigeria’s downstream sector. It has been described by President Ruto as “a masterpiece of science, engineering and art”.
Dangote has about $46 billion of projects in his pipeline through 2030 and plans to spend as much as $50 billion over the next four years expanding his business empire across the continent.
The Lamu refinery will extend his presence from the Atlantic coast to the Indian Ocean and solidify his position as the dominant force in African industrialisation.
The groundbreaking today is a moment of national significance, but challenges remain.
A land dispute in Chandavai, Lamu County, where 133 residents have sued to stop construction, is pending in court — although the High Court has declined to block the project.
“This is not a problem. We know the people who are doing this and we will face them. We are used to this in Africa,” Dangote said at a function at the Nairobi Securities Exchange in Nairobi.
Crude supply constraints also persist, as Kenya has yet to establish commercial oil production at scale. Dangote has played that down.
“Kenya, South Sudan, and Uganda have their own oil, and a lot of other countries will soon discover their oil. Fossil fuels are here to stay because oil produces 6,800 items,” Dangote said.