Dangote’s $16 Billion Kenya Refinery Faces Second Legal Challenge

Aliko Dangote’s planned $16 billion oil refinery in Kenya is facing a second legal challenge, with a consumer rights organisation seeking disclosure of key details surrounding the project and the government’s planned stake in it.

The Consumers Federation of Kenya (COFEK) has petitioned the Public Private Partnerships Petition Committee, alleging that important information and approvals related to the 700,000-barrel-per-day refinery have not been made public, according to COFEK Secretary General Stephen Mutoro.

The organisation is seeking to have any approvals that do not comply with legal requirements set aside and reconsidered. It is also demanding disclosure of the proposed structure for the Kenyan government’s investment, including the vehicle through which it would acquire its stake, the class of shares involved and payment terms.

COFEK is also seeking evidence that the public was given an opportunity to participate in decisions surrounding the project.

The petition adds to legal uncertainty surrounding the refinery just days after more than 130 residents filed a separate case challenging the use of land in Lamu, where the facility is planned. The residents say the land forms part of their ancestral heritage. A hearing in that case is scheduled for October 14.

The latest challenge comes shortly after Dangote broke ground on the refinery on Wednesday. The Nigerian billionaire dismissed concerns over the land dispute and expressed confidence that construction would proceed.

“Anybody who wants to cause trouble, we are ready,” Dangote said at the groundbreaking ceremony.

A spokesperson for Dangote Group declined to comment on the latest petition, while a Kenyan government spokesperson did not immediately respond to requests for comment.

The Lamu refinery is part of Dangote’s plan to replicate the 700,000-barrel-per-day facility operated by his group in Nigeria. The company has offered regional governments a combined 30 percent stake in the Kenyan project, which is scheduled for completion in 2030.

The refinery would make the Lamu project one of the largest planned oil-processing facilities in East Africa, although its construction now faces challenges over land rights and the transparency of the public-private partnership arrangements.

Source: FSX Business News