Africa’s richest man, Aliko Dangote, has announced that construction of the proposed Lamu oil refinery will begin by October this year, while revealing that the project’s estimated cost has been revised downwards by Ksh2 billion.
Dangote said the refinery will serve Kenya and other countries across East Africa, with the project expected to take less than four years to complete once construction begins.
“The plans for the refinery have gone very far with Kenya because what we are trying to do is to make sure that in most African countries we make them sufficient in their own energy needs,” Dangote told the BBC.
He said preparations for its construction are in an advanced stage, with the ground-breaking of the project set to take place no later than October, marking the beginning of construction of the massive facility.
“By October this year, we will be groundbreaking. Once we break the ground, we will begin the construction,” Dangote said.
The proposed refinery is expected to have a processing capacity of 700,000 barrels of crude oil per day, making it one of the largest planned oil-processing facilities in Africa and a major addition to Kenya’s petroleum stock.
Dangote said the refinery would not be limited to the Kenyan market but would serve a wider regional market, potentially supplying petroleum products to several countries in East Africa and beyond, including Egypt.
“The refinery will not only be for Kenya but East Africa as a whole, so it can serve a lot of countries, including Egypt,” he said.
The billionaire also revealed that the projected cost of the project had been reduced from an earlier estimate of Ksh2.2 trillion to about Ksh2 trillion.
“We first thought it was going to cost $17 billion, but it will cost less than that, about $16 billion,” Dangote said.
He attributed the reduction partly to lessons learned from constructing his company’s refinery in Nigeria, saying the Kenyan project would be implemented faster and therefore incur lower financing costs.
“It will cost less because this one will be faster, so in terms of financing cost it will be less, and then we are wiser as a company than when we built the one in Nigeria,” he said.
Dangote said the project will be financed through a combination of equity and debt, with the company planning to provide 30 per cent of the financing through equity and raise the remaining 70 per cent through debt.
The refinery is expected to become one of the largest private-sector investments in Kenya and will create thousands of jobs across construction, engineering, logistics, manufacturing, energy and other supporting industries.
Culled from citizen.digital
