Ruto backs Sh2.2tn Lamu refinery despite court battle

NAIROBI, Kenya, Sep 28 – President William Ruto has said the planned East Africa Refinery in Lamu will open up a Sh2 trillion investment opportunity, create about 60,000 jobs and supply petroleum products to eight countries in the region.

The President said the project would be formally launched on Wednesday, September 30, with the groundbreaking ceremony expected to mark the start of construction of what the government says will become a major regional petroleum and industrial hub.

“We will have a refinery that will unite at least eight countries which will be constructed in Lamu and give us a chance for investment of about Sh2 trillion and give employment opportunities of 60,000,” President Ruto said.

He said the refinery would also help Kenya earn foreign exchange and reduce the amount of money spent importing refined petroleum products.

The President  who was in Lungalunga,Kwale county during the issuance of title deeds linked the project to his administration’s efforts to transform the Coast region, saying the investment would help address what he described as decades of marginalisation.

“On Wednesday this week, 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.

This is even as  at least 133 residents of Chandavai in Lamu County have moved to court seeking to stop what they describe as the unlawful takeover and destruction of land they say their families have occupied and used for generations.

The residents have sued the Office of the President, the Cabinet Secretary for Defence, the State Department for Lands and Physical Planning, the Attorney General, the National Land Commission (NLC), the Lamu Port-South Sudan-Ethiopia Transport (LAPSSET) Corridor Development Authority and the Lamu County Government.

They have also named Dangote Industries and two companies identified as contractors as defendants.

In court papers, they say their families have used the land for farming and livestock keeping for generations and have established homes, mosques, shrines and other structures.

Lamu Port

The groundbreaking comes after the first major shipment of construction equipment for the project arrived at Lamu Port over the weekend.

The vessel MV Da Yang Bai He docked at Berth Three carrying about 2,930 metric tonnes of construction materials and heavy equipment destined for the refinery project. The arrival has been described as a significant step towards the start of construction.

The refinery is planned for Kililana in Lamu West and will have a processing capacity of 700,000 barrels of crude oil per day, making it one of the largest planned refining facilities on the continent.

The facility is being developed with the involvement of Nigerian industrialist Aliko Dangote and the Africa Finance Corporation (AFC). President Ruto met Dangote and AFC chief executive Samaila Zubairu in New York last week to discuss financing and preparations for the project.

Ruto subsequently toured Dangote’s existing refinery in Lagos ahead of the Lamu groundbreaking, saying the experience had given him a clearer picture of the scale of the proposed Kenyan facility. The Lagos refinery has a design capacity of 650,000 barrels per day, while the proposed Lamu facility is planned for 700,000 barrels per day.

Regional market

The government expects the refinery to supply refined petroleum products to Kenya and markets across the region.

The eight markets identified include Uganda, Tanzania, Rwanda, Burundi, South Sudan, Ethiopia and the Democratic Republic of Congo, in addition to Kenya.

The project is therefore being positioned as more than a Kenyan refinery, with the government seeking to establish Lamu as a regional energy and petroleum-processing centre.

The facility is also expected to strengthen the strategic role of the Lamu Port-South Sudan-Ethiopia Transport (LAPSSET) corridor, with petroleum processing, storage, logistics and other industrial activities expected to develop around the refinery.

Deputy President Kithure Kindiki has said the project could create more than 50,000 jobs, while President Ruto has put the projected employment opportunities at about 60,000. The jobs figure is expected to cover employment generated directly and through associated economic activities.

Investment and industrialisation

The refinery has been presented by the government as an anchor investment for a wider industrial complex in Lamu.

Plans associated with the project include a special economic zone and a proposed 1,000-megawatt power plant, which are intended to support manufacturing and other industries around the refinery.

The government has also indicated that the refinery will process crude from Kenya’s Turkana oil fields, alongside supplies from the wider region and potentially other sources. Questions over the availability and transportation of sufficient crude have, however, remained part of the wider discussion around the project.

Dangote has offered East African countries a combined 30 per cent stake in the project, with Kenya having been offered a 10 per cent stake valued at about Sh64.7 billion, according to government-linked reports. Rwanda and Ethiopia have also expressed interest in participating in the regional shareholding.

The September 30 ceremony is expected to be attended by President Ruto, Aliko Dangote and several regional Heads of State and Government. Lamu officials have been making security, airport and logistical preparations for the event, with about 14 Heads of State expected to attend.

For the Coast region, the government is presenting the refinery as a flagship investment that will anchor new economic activity around Lamu Port while expanding Kenya’s role in regional energy trad