Construction of the proposed East Africa Oil Refinery in Lamu, Kenya, backed by Nigerian industrialist Aliko Dangote, is scheduled to begin on September 30.

The refinery is expected to have a processing capacity of 700,000 barrels of crude oil per day when completed, with plans to supply refined petroleum products to Kenya and other East African countries.

Kenyan officials have estimated the cost of the project at about $17 billion, while Dangote has put the investment at up to $20 billion. The facility is planned for development at the deep-water port in Lamu and is expected to serve markets including Kenya, Uganda, South Sudan, Rwanda, Burundi and the Democratic Republic of Congo.

About $1.6 billion in financing has so far been disclosed for the project. Tanzanian businessman Mohammed Dewji has also committed $100 million, while Dangote Group has offered East African countries a combined 30 per cent equity stake valued at $1.5 billion.

Kenya’s share of the proposed equity participation has been estimated at about $500 million for a 10 per cent stake.

The project is also linked to plans for crude oil transportation from Turkana to Lamu. Kenyan President William Ruto has discussed the construction of a pipeline connecting Turkana’s oil fields with Lamu, which would provide a route for supplying crude to the refinery.

The cost, capacity and completion timeline for the proposed pipeline have not been disclosed.

The Lamu refinery is expected to face competition from another major energy development in East Africa. Tanzania and Uganda are working with Vitol Bahrain on a proposed $20 billion energy hub in Tanga, while Uganda is also developing a separate 60,000-barrel-per-day refinery in Hoima with support from the United Arab Emirates.

Dangote expects the Lamu refinery to be completed between 2029 and 2030. Construction is expected to run for about three years after the groundbreaking ceremony.