Dangote plans to raise KSh 65 billion from Kenyan Investors in an IPO to fund part of the KSh 2.2 trillion Lamu project.
Dangote Petroleum Refinery said is preparing Africa’s biggest-ever stock market listing, targeting about Ksh646 billion ($5 billion) through an IPO expected to conclude in October.
Kenyan investors could account for up to Ksh65 billion ($500 million) of the fundraising, with pension funds among those expressing strong interest. Nairobi Securities Exchange is expected to take part in the IPO.
The 650,000-barrel-per-day refinery in Nigeria, majority-owned by Aliko Dangote, plans to use the proceeds to expand capacity and support plans for a similar refinery in Kenya. The construction of the Lamu project is expected to begin before the end of 2026.
The IPO application has already been submitted to Nigeria’s Securities and Exchange Commission, with a prospectus expected in September pending approval.
Analysts maintain that this plan from Dangote Industries to build a massive refinery off Kenya’s coast could reshape fuel supply, trade and economic growth across East Africa.
Dangote to replicate the Nigerian oil refinery in Lamu
The refinery on Lamu Island is intended to replicate the Dangote Petroleum Refinery in Lagos — Africa’s largest facility of its kind.
Aliko Dangote has already confirmed the final location of his new oil refinery in East Africa: Lamu Island off the Kenyan coast.
The facility is set to change not only Kenya but the entire region, with a projected refinery output of 700,000 barrels per day. Once operational, the facility is expected to become Africa’s second-largest refinery.
Oge Onubogu, a director and senior fellow at the Center for Strategic and International Studies in Washington, DC, told DW that “people on the ground [think] it’s wonderful that this investment is coming into Kenya; just the potential about the jobs that could be created, not only for local Kenyan economies but more broadly for the region.”
“It’s a massive project, but one that is needed in many ways on the continent and in the East Africa region,” she said.
Tanzania and Kenya competed for the refinery project for months before Dangote chose Lamu Island.
Dangote Industries Limited has not yet announced the projected cost of the ambitious undertaking.
However, according to Bloomberg, building the proposed refinery could run up a bill of up to $17 billion (15 billion euros), making it one of the largest privately funded industrial projects in the region to date.
Dangote Industries intends to fund the project through a mix of internally generated revenue, bond issuances and proceeds from the planned initial public offering (IPO) of Dangote Petroleum Refinery, according to Reuters.
However, Nigeria’s Securities and Exchange Commission stated that it has neither received nor approved an IPO application, raising questions about the extent to which the financing process of the facility can be considered a done deal.
According to media reports, Dangote has said that any East African refinery project would require anti-dumping protections to prevent cheaper imported fuels from undercutting local refining operations.
The planned IPO, whose proposed timeline is fairly tight according to sources, has caught the attention from investors across Africa. Stock exchanges in South Africa, Kenya, Egypt, Ghana and Rwanda have held a series of meetings with the refinery’s advisers in recent months to take part in the deal.
Kenyan capital markets could raise as much as $500 million of the Dangote IPO target, sources said, adding that there is “tremendous” appetite for the issue among local investors such as pension funds.
A second source with direct knowledge of the deal said Dangote Petroleum Refinery & Petrochemicals FZE, which has submitted its IPO application to Nigeria’s Securities and Exchange Commission, is expected to receive approval in the coming weeks and be able to publish a prospectus in September.
The first source said the IPO’s target was $5 billion but cautioned that the final figure would depend on what the Nigerian regulator approved as the primary listing will be on the Nigerian Stock Exchange.
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