Ruto says Kenya will take stake in Dangote Lamu refinery, shares to be offered at NSE

President William Ruto has announced that the Kenyan government intends to acquire a stake in the planned $16 billion Dangote East Africa Oil Refinery in Lamu, while ordinary Kenyans are also expected to get an opportunity to invest in the project through the Nairobi Securities Exchange.

Speaking during the refinery's groundbreaking ceremony in Lamu on Wednesday, Ruto said the government would use assets including land and the National Infrastructure Fund to participate in the project rather than seeking a free allocation of shares.

“The Government of Kenya is going to have a stake in the refinery,” Ruto said. “We do not want anything for free.”

The announcement adds detail to the ownership structure of the proposed 700,000-barrel-a-day refinery. Dangote has offered East African governments a combined 30 per cent stake in the project, with payments potentially spread over four years.

Ruto said Dangote also intends to make shares in the Lamu refinery available through Kenya's capital markets, potentially allowing retail and institutional investors to participate.

He encouraged Kenyans with the financial capacity to consider the opportunity once shares become available, while pointing to the recent growth of the Nairobi Securities Exchange.

'Groundbreaking is a promise'

Ruto, however, cautioned against treating Wednesday's ceremony as evidence that the project was already assured of success.

“A groundbreaking is a promise. A refinery is a promise kept,” he said.

The President listed financing, infrastructure, workforce training, crude-oil supply, market access and timely construction among the challenges that must still be addressed.

“Every figure we speak of today is a target. None of it is automatic,” he said.

Dangote has set a 40-month timeframe for completion of the refinery, according to Ruto's remarks at the ceremony. Reuters has previously reported a broader target of completion by 2030.

The President said setting a deadline would allow the government and public to measure progress as the project moves from groundbreaking into construction.

Refinery to anchor Lamu Port and LAPSSET

Ruto also positioned the refinery as a potential anchor investment for Lamu Port and the wider LAPSSET Corridor.

“A corridor without commerce is just a road, and a port without industry is just a harbour,” he said.

He said the refinery could generate business for transporters, engineers, contractors and service providers, while attracting petrochemical and manufacturing investments around Lamu.

The government sees that activity as a way of turning existing infrastructure investments into a wider industrial economy connecting the coast with Kenya's interior and neighbouring countries.

Ruto pushes private financing model

The President said the refinery also demonstrated the government's intention to rely more heavily on private capital for major infrastructure and industrial projects.

He argued that Kenya could not finance every road, railway, port, energy project and industrial development through taxation and public borrowing.

Ruto said the National Infrastructure Fund would instead be used to mobilise government assets and attract investment from private companies, pension funds, insurers, capital markets and international investors.

The Dangote project, he said, would be government-enabled but private sector-driven, with the state providing infrastructure, regulation, coordination and policy certainty while private investors provide capital and technical expertise.

Ruto attacks alleged 'extortionists'

Ruto also used his speech to strongly criticise people he accused of attempting to extract benefits from major investors.

He alleged that some individuals making public statements and sponsoring court cases against major investments were motivated by extortion.

The allegation was not accompanied in the speech excerpt by evidence identifying particular individuals, and residents involved in the current Lamu litigation say their case concerns ancestral land, ownership and compensation. The Environment and Land Court has ordered the status quo maintained on disputed portions of the project land until the case is heard on October 14.

Ruto said investors should instead be regarded as development partners and promised Dangote that his administration would prevent demands for improper benefits.

The President cited Dangote's investment experience in Ethiopia, where the government provided a long-term market for fertiliser, as an example of the incentives governments can use to attract large industrial investments.

For Ruto, the broader objective is to establish Kenya as a destination where private capital can finance projects that the government cannot fund solely through taxes and borrowing.

The refinery officially broke ground on Wednesday. It is planned to process 700,000 barrels of crude oil per day and is expected to serve Kenya, East Africa and export markets.