Plans for the construction of a major oil refinery in Lamu, Kenya, have received a boost following the completion of a $1 billion (about Sh130 billion) underwriting programme for Dangote Petroleum Refinery.

The financing arrangement is linked to the planned initial public offering of Dangote’s Nigerian refinery and is structured to support both the existing facility in Nigeria and the proposed refinery in Lamu.

The Lamu project is part of plans by Dangote Industries to expand its refining operations into East Africa. The proposed facility is expected to have a processing capacity of about 700,000 barrels of crude oil per day, potentially making it one of the region’s largest refining projects.

The underwriting programme consists of a $600 million private placement that has already been completed and an additional $400 million commitment tied to the planned IPO. The latter remains subject to market conditions, regulatory approvals and other transaction requirements.

Dangote’s Nigerian refinery, located near Lagos, currently has a capacity of about 700,000 barrels per day and is preparing for a major stock market listing. The company has applied for a potential $5 billion IPO, although the final size of the offering has not been determined.

The proposed Lamu refinery is expected to strengthen Kenya’s refining capacity and improve access to petroleum products across East Africa. Its location on Kenya’s coast also offers access to maritime infrastructure and regional markets.

For Dangote, the Kenyan investment would mark a significant expansion of its energy business beyond Nigeria and strengthen its position in Africa’s growing downstream petroleum market.

The new financing support comes as the group seeks to attract more capital for its refining ambitions, with the Lamu project expected to play a major role in its longer-term expansion strategy.