Africa’s richest man, Aliko Dangote, has acquired a 25 per cent stake in Kenya Pipeline Company (KPC) in a deal valued at roughly $327.4 million, deepening his investments in East Africa’s petroleum business as he advances plans to construct a $16 billion refinery in Kenya.
Dangote disclosed the acquisition on Wednesday on the Financial Times Africa Summit in London, confirming that his enterprise pursuits had purchased a major stake within the firm chargeable for transporting petroleum merchandise throughout Kenya and into neighbouring markets.
“We bought 25 per cent of their pipeline network for the distribution of petroleum products,” he stated of the transaction which concerned the acquisition of roughly 4.5 billion shares, in keeping with a report launched by the Nairobi Securities Exchange on Monday.
The acquisition comes because the Nigerian industrialist pushes forward with plans to determine a 700,000-barrel-per-day refinery at Lamu, on Kenya’s Indian Ocean coast. The mission, which broke floor on September 30, is estimated to price between $16 billion and $17 billion, with completion focused for round 2030.
The refinery is modelled on Dangote’s current 700,000-barrel-per-day facility within the Lekki space of Lagos, which has turn out to be a serious element of his increasing pursuits in refining and petrochemicals.
Kenya Pipeline Company operates important infrastructure connecting petroleum import services alongside the coast to inland consumption centres, making it a strategic element of the nation’s gasoline provide chain.
Established in 1973 and commencing business operations in 1978, the corporate operates a pipeline community spanning roughly 1,342 kilometres, supported by storage depots, pumping stations and loading services. Its infrastructure additionally facilitates petroleum distribution to different East African international locations.
The newest transaction provides Dangote a considerable curiosity within the infrastructure via which petroleum merchandise will be moved from coastal import terminals to inland markets, alongside his proposed funding in home refining capability.
“We are going very aggressively with that,” he stated on the Financial Times London occasion. Distribution of oil merchandise is central to his technique, he stated.
In an extra indication of the rising hyperlinks between Dangote’s investments and Kenya’s power ambitions, the Kenyan authorities has additionally expressed curiosity in taking an fairness stake within the proposed Lamu refinery via its National Infrastructure Fund (NIF).
President William Ruto introduced the plan on the refinery’s groundbreaking ceremony in September, describing the proposed funding as a part of efforts to extend Kenya’s participation in main industrial and infrastructure tasks.
Dangote’s newest acquisition extends his pursuits past refining into the transportation infrastructure required to distribute petroleum merchandise throughout East Africa, doubtlessly positioning his enterprise group to take part in a number of levels of the area’s petroleum worth chain.
The Kenyan pipeline firm was state-owned till the federal government floated 65 per cent of its shares earlier this yr.
Dangote’s plans signify an bold try and construct an built-in African refining, storage and distribution enterprise, with Kenya serving as a regional hub for east Africa and Namibia for southern Africa.
Kenya Pipeline’s 1,300km community transports diesel, petrol and jet gasoline from the port of Mombasa throughout Kenya, supplying each the home market and neighbouring international locations together with Uganda, the Democratic Republic of Congo, South Sudan and Rwanda.
In Namibia, Dangote plans to construct gasoline storage tanks that may greater than triple the capability of the nation’s current nationwide storage facility. The Atlantic port of Walvis Bay gives a gateway to inland markets together with Zambia, Botswana and Zimbabwe, in addition to South Africa. Dangote stated his firm would start work on the 330 million litre “tank farm” after a groundbreaking early subsequent month.
A second storage facility in Djibouti would provide Ethiopia, he added. The firm’s founder additionally stated he was “finalising plans” for an additional storage facility in Cameroon, West Africa.
Besides, Dangote rejected any suggestion that he must be investing in renewables as a substitute of oil refining, saying occasions in Iran had proved his technique proper.
“What we did in the last couple of months has demonstrated that,” he stated. “We supply over 20 per cent of the . . . jet fuel in Europe,” he added, suggesting that European and different airways, together with Ethiopian Airlines, Africa’s largest, would wrestle to fly with out jet gasoline from Nigeria.
“Oil is going to continue to be in demand. People who have deceived themselves that there’s going to be (an energy) transition, they can do that. We will go the other way,” he harassed.
Dangote additionally defended the safety he has acquired from the African international locations by which he operates, one thing he has insisted is critical to make the Kenyan refinery viable.
“It is not about Dangote’s modus operandi. It is the modus operandi of any sensible nation,” he stated. “If America is now saying no we are going to protect our industries, who are we in Africa not to protect our industries?”
He predicted that protectionism would proceed to collect pressure. “The entire motor industry in Europe is on the verge of collapse, it’s in big trouble. There will be a heavy duty imposed on the import of Chinese vehicles,” he stated.
“People should protect their own market. If you have a common market, you should protect that,” referring to the African Continental Free Trade Area (AFCTA) which hyperlinks Africa’s 54 international locations in a single market in idea.
According to him, Africa’s aspiration for financial transformation will stay troublesome to attain with out important investments in infrastructure mixed with industrial insurance policies that promote native manufacturing, protect productive capability and create sustainable employment alternatives.
“Allowing imports to displace local production means we are exporting our jobs out of the continent and importing poverty into the continent,” Dangote stated.
In all, he stated, his firm deliberate to take a position $50 billion by 2030 and aimed to achieve revenues of $100 billion by that date.
Looking past the power sector, Dangote recognized insufficient energy provide, weak monetary methods and underdeveloped industrial insurance policies as main challenges constraining Africa’s financial development.
He described electrical energy as a elementary requirement for industrialisation, notably in manufacturing, mining and mineral processing, the place dependable energy is crucial for worth addition.
With an estimated 650 million Africans nonetheless missing entry to electrical energy, he harassed that addressing the continent’s power deficit would unlock important alternatives for job creation, industrial growth and financial diversification.
Questioning why a continent blessed with plentiful pure assets, huge arable land and a younger inhabitants continues to grapple with poverty, Dangote insisted that Africa possesses all of the elements essential to turn out to be a serious industrial powerhouse.
He expressed optimism in regards to the continent’s trajectory, sustaining that Africa’s industrial awakening has already begun. “The journey has started,” Dangote declared. “But now we’re awake, and we will make it happen,” he identified.
Meanwhile, building of Aliko Dangote’s proposed refinery in Kenya has gathered momentum, with a second vessel delivering heavy gear to Lamu Port as preparations advance for the $16 billion mission.
The vessel, MV Great Prosperity, arrived from China on the port in Kililana, carrying 154 items of heavy building gear for the deliberate Dangote East Africa Petroleum Refinery and Petrochemicals Special Economic Zone (SEZ), in keeping with The Nation, Kenya.
Lamu Port General Manager, Captain Abdulaziz Mzee, described the most recent cargo as a major milestone for regional commerce and maritime enterprise, noting that the refinery mission was already producing extra exercise on the port.
He stated the event would maintain a stream of vessels transporting gear required for the development of the refinery, with extra shipments anticipated within the coming weeks.
The newest supply follows the arrival of the primary consignment on September 26, when one other vessel, MV Da Yang Bai, delivered 2,930.295 metric tonnesof building gear and supplies to help the mission.
The groundbreaking ceremony for the refinery and petrochemicals complicated was held at Lamu Port on September 30, with Kenyan President William Ruto, 4 different African heads of state and Dangote in attendance.
Mzee stated the refinery’s operations would rely considerably on Lamu Port infrastructure for the importation of crude oil feedstock and the export of refined petroleum merchandise, together with diesel, aviation gasoline and petrol.
He stated the mission was anticipated to extend vessel visitors, enhance port revenues and stimulate financial exercise within the area.
The port supervisor added that extra gear would even be transported by street from Mombasa, the place some consignments had been delivered by sea.
In an announcement, the Lamu Port-South Sudan-Ethiopia Transport (LAPSSET) Corridor Development Authority confirmed the arrival of the most recent cargo, describing the consignments as strengthening Kenya’s place as a serious commerce and logistics gateway in East Africa.
The proposed refinery is anticipated to cut back Kenya’s dependence on imported petroleum merchandise whereas supporting the event of its home oil business.
Beyond refining, the built-in complicated will embody an influence plant with a capability of about 1,000 megawatts, alongside fertiliser manufacturing services and petrochemical items.
Dangote stated in the course of the groundbreaking ceremony that building would take roughly 40 months, with operations anticipated to start in early 2030.
He expressed confidence that the success of the Dangote Petroleum Refinery in Lekki, Lagos, might be replicated in Kenya.
“Lekki refinery in Nigeria proved that it is capable, so Lamu must prove that it can be repeated,” he stated.
The mission is projected to create roughly 60,000 jobs throughout building and operations, making it one of many main industrial developments deliberate for the East African area.
Emmanuel Addeh
Follow us on:
