Dangote Expands African Footprint, Acquires 25% Stake in Kenya Pipeline for $327m

• Eyes new projects in Djibouti, Ethiopia, Cameroon, Namibia  

•Dismisses energy transition, says oil will retain relevance

•Reiterates call for protection of local industries 

•Second ship delivers equipment at Dangote’s $16bn Kenya refinery

Emmanuel Addeh in Abuja

Africa’s richest man, Aliko Dangote, has acquired a 25 per cent stake in Kenya Pipeline Company (KPC) in a deal valued at approximately $327.4 million, deepening his investments in East Africa’s petroleum industry as he advances plans to build a $16 billion refinery in Kenya.

Dangote disclosed the acquisition yesterday at the Financial Times Africa Summit in London, confirming that his business interests had bought a significant stake in the company responsible for transporting petroleum products across Kenya and into neighbouring markets.

“We bought 25 per cent of their pipeline network for the distribution of petroleum products,” he said of the transaction which involved the purchase of approximately 4.5 billion shares, according to a report released by the Nairobi Securities Exchange on Monday.

The acquisition comes as the Nigerian industrialist pushes ahead with plans to establish a 700,000-barrel-per-day refinery at Lamu, on Kenya’s Indian Ocean coast. The project, which broke ground on September 30, is estimated to cost between $16 billion and $17 billion, with completion targeted for around 2030.

The refinery is modelled on Dangote’s existing 700,000-barrel-per-day facility in the Lekki area of Lagos, which has become a major component of his expanding interests in refining and petrochemicals.

Kenya Pipeline Company operates critical infrastructure connecting petroleum import facilities along the coast to inland consumption centres, making it a strategic component of the country’s fuel supply chain.

Established in 1973 and commencing commercial operations in 1978, the company operates a pipeline network spanning approximately 1,342 kilometres, supported by storage depots, pumping stations and loading facilities. Its infrastructure also facilitates petroleum distribution to other East African countries.

The latest transaction gives Dangote a substantial interest in the infrastructure through which petroleum products can be moved from coastal import terminals to inland markets, alongside his proposed investment in domestic refining capacity.

“We are going very aggressively with that,” he said at the Financial Times London event. Distribution of oil products is central to his strategy, he said.

In a further indication of the growing links between Dangote’s investments and Kenya’s energy ambitions, the Kenyan government has also expressed interest in taking an equity stake in the proposed Lamu refinery through its National Infrastructure Fund (NIF).

President William Ruto announced the plan at the refinery’s groundbreaking ceremony in September, describing the proposed investment as part of efforts to increase Kenya’s participation in major industrial and infrastructure projects.

Dangote’s latest acquisition extends his interests beyond refining into the transportation infrastructure required to distribute petroleum products across East Africa, potentially positioning his business group to participate in multiple stages of the region’s petroleum value chain.

The Kenyan pipeline company was state-owned until the government floated 65 per cent of its shares earlier this year.

Dangote’s plans represent an ambitious attempt to build an integrated African refining, storage and distribution business, with Kenya serving as a regional hub for east Africa and Namibia for southern Africa.

Kenya Pipeline’s 1,300km network transports diesel, petrol and jet fuel from the port of Mombasa across Kenya, supplying both the domestic market and neighbouring countries including Uganda, the Democratic Republic of Congo, South Sudan and Rwanda.

In Namibia, Dangote plans to build fuel storage tanks that would more than triple the capacity of the country’s existing national storage facility. The Atlantic port of Walvis Bay provides a gateway to inland markets including Zambia, Botswana and Zimbabwe, as well as South Africa. Dangote said his company would begin work on the 330 million litre “tank farm” after a groundbreaking early next month.

A second storage facility in Djibouti would supply Ethiopia, he added. The company’s founder also said he was “finalising plans” for another storage facility in Cameroon, West Africa.

Besides, Dangote rejected any suggestion that he should be investing in renewables instead of oil refining, saying events in Iran had proved his strategy right.

“What we did in the last couple of months has demonstrated that,” he said. “We supply over 20 per cent of the . . . jet fuel in Europe,” he added, suggesting that European and other airlines, including Ethiopian Airlines, Africa’s biggest, would struggle to fly without jet fuel from Nigeria.

“Oil is going to continue to be in demand. People who have deceived themselves that there’s going to be (an energy) transition, they can do that. We will go the other way,” he stressed.

Dangote also defended the protection he has received from the African countries in which he operates, something he has insisted is necessary to make the Kenyan refinery viable.

“It is not about Dangote’s modus operandi. It is the modus operandi of any sensible nation,” he said. “If America is now saying no we are going to protect our industries, who are we in Africa not to protect our industries?”

He predicted that protectionism would continue to gather force. “The entire motor industry in Europe is on the verge of collapse, it’s in big trouble. There will be a heavy duty imposed on the import of Chinese vehicles,” he said.

“People should protect their own market. If you have a common market, you should protect that,” referring to the African Continental Free Trade Area (AFCTA) which links Africa’s 54 countries in a single market in theory.

According to him, Africa’s aspiration for economic transformation will remain difficult to achieve without significant investments in infrastructure combined with industrial policies that promote local manufacturing, preserve productive capacity and create sustainable employment opportunities.

“Allowing imports to displace local production means we are exporting our jobs out of the continent and importing poverty into the continent,” Dangote said.

In all, he said, his company planned to invest $50 billion by 2030 and aimed to reach revenues of $100 billion by that date.

Looking beyond the energy sector, Dangote identified inadequate power supply, weak financial systems and underdeveloped industrial policies as major challenges constraining Africa’s economic growth.

He described electricity as a fundamental requirement for industrialisation, particularly in manufacturing, mining and mineral processing, where reliable power is essential for value addition.

With an estimated 650 million Africans still lacking access to electricity, he stressed that addressing the continent’s energy deficit would unlock significant opportunities for job creation, industrial development and economic diversification.

Questioning why a continent blessed with abundant natural resources, vast arable land and a young population continues to grapple with poverty, Dangote insisted that Africa possesses all the ingredients necessary to become a major industrial powerhouse.

He expressed optimism about the continent’s trajectory, maintaining that Africa’s industrial awakening has already begun. “The journey has started,” Dangote declared. “But now we’re awake, and we will make it happen,” he pointed out.

Meanwhile, construction of Aliko Dangote’s proposed refinery in Kenya has gathered momentum, with a second vessel delivering heavy equipment to Lamu Port as preparations advance for the $16 billion project.

The vessel, MV Great Prosperity, arrived from China at the port in Kililana, carrying 154 pieces of heavy construction equipment for the planned Dangote East Africa Petroleum Refinery and Petrochemicals Special Economic Zone (SEZ), according to The Nation, Kenya.

Lamu Port General Manager, Captain Abdulaziz Mzee, described the latest shipment as a significant milestone for regional trade and maritime business, noting that the refinery project was already generating additional activity at the port.

He said the development would sustain a stream of vessels transporting equipment required for the construction of the refinery, with more shipments expected in the coming weeks.

The latest delivery follows the arrival of the first consignment on September 26, when another vessel, MV Da Yang Bai, delivered 2,930.295 metric tonnes of construction equipment and materials to support the project.

The groundbreaking ceremony for the refinery and petrochemicals complex was held at Lamu Port on September 30, with Kenyan President William Ruto, four other African heads of state and Dangote in attendance.

Mzee said the refinery’s operations would depend significantly on Lamu Port infrastructure for the importation of crude oil feedstock and the export of refined petroleum products, including diesel, aviation fuel and petrol.

He said the project was expected to increase vessel traffic, boost port revenues and stimulate economic activity in the region.

The port manager added that additional equipment would also be transported by road from Mombasa, where some consignments had been delivered by sea.

In a statement, the Lamu Port-South Sudan-Ethiopia Transport (LAPSSET) Corridor Development Authority confirmed the arrival of the latest shipment, describing the consignments as strengthening Kenya’s position as a major trade and logistics gateway in East Africa.

The proposed refinery is expected to reduce Kenya’s dependence on imported petroleum products while supporting the development of its domestic oil industry.

Beyond refining, the integrated complex will include a power plant with a capacity of about 1,000 megawatts, alongside fertiliser production facilities and petrochemical units.

Dangote said during the groundbreaking ceremony that construction would take approximately 40 months, with operations expected to begin in early 2030.

He expressed confidence that the success of the Dangote Petroleum Refinery in Lekki, Lagos, could be replicated in Kenya.

“Lekki refinery in Nigeria proved that it is capable, so Lamu must prove that it can be repeated,” he said. The project is projected to create approximately 60,000 jobs during construction and operations, making it one of the major industrial developments planned for the East African region.