Nigeria billionaire businessman, Aliko Dangote, is facing another legal challenge over his planned $16bn oil refinery in Kenya, barely days after residents filed a separate case challenging the project.
The latest challenge was brought by the Consumers Federation of Kenya, COFEK, which is seeking a review of the Kenyan government’s proposed 10 per cent equity stake in the 700,000-barrel-per-day refinery planned for Lamu.
COFEK filed a petition before the Public Private Partnerships Petition Committee under Section 75 of Kenya’s Public Private Partnerships Act, 2021, asking the committee to scrutinise the government’s proposed equity contribution, land arrangements and other forms of state support for the project.
The consumer-rights group is particularly seeking clarification on the government’s reported KES65bn ($500m) investment in the refinery, including the vehicle through which the stake would be acquired, the class of shares involved and the terms of payment.
Kenyan President William Ruto announced the government’s proposed stake during the September 30 groundbreaking ceremony for the refinery. COFEK is also demanding clarification on a reported KES21.5bn seed allocation linked to the project and whether public land would form part of the government’s contribution.
In an affidavit supporting the petition, COFEK Secretary-General, Stephen Mutoro, said he had not been provided with the decision authorising the project, the identity of the contracting authority or details of the procurement process.
It would be recalled that 133 residents filed a case at the Malindi Environment and Land Court, challenging the allocation of the disputed land earmarked for the refinery. The residents argued that the project could proceed only after the ownership and use of the land had been properly determined. The court ordered the parties to maintain the status quo but declined to stop the groundbreaking ceremony.
The land dispute is scheduled for hearing on October 14. The African Energy Chamber has warned that prolonged legal proceedings could affect the project’s construction timeline.
Dangote Group, which operates the 650,000-barrel-per-day Dangote Refinery in Lekki, Lagos, said the land case would not stop the launch of the Kenyan project, although it could affect some activities at the site.
Ahead of the groundbreaking, the company responded to the residents’ legal action by saying it was prepared to defend the project in court.
President Ruto and Dangote jointly presided over the groundbreaking ceremony. The Kenyan president had earlier insisted that the project would proceed despite the court proceedings, accusing what he described as “disgruntled opposition sponsors” of attempting to undermine the investment.
Opposition politician and People’s Party of Kenya leader, Ndindi Nyoro, has separately called on the government to publish the names of all shareholders in the refinery.
The Lamu refinery is expected to become Kenya’s largest-ever foreign direct investment. Dangote has said crude oil for the facility would initially be imported by sea from the Middle East, the United States and other markets.
The Nigerian businessman has pledged to complete the refinery within 40 months of the groundbreaking, putting the project on course for the 2030 completion target cited by the African Energy Chamber.
Meanwhile, COFEK is also challenging a KES93.68bn oil-storage agreement between the Kenyan government and Gulf Energy, with the High Court having certified the petition as urgent.
