Nigerian billionaire Aliko Dangote said on Tuesday that investor demand for shares in his Lagos oil refinery had exceeded expectations, as his group prepares to begin work on a $16 billion refinery in Kenya aimed at expanding its presence across East Africa.
Dangote said the $1.6 billion initial public offering (IPO), launched earlier this month to finance the expansion of his Nigerian refinery, had attracted substantial interest from retail investors and demonstrated the strength of the country’s capital markets.
The offering, promoted as a public investment opportunity, is expected to become Africa’s largest IPO and will help finance plans to double the Lagos refinery’s processing capacity to 1.4 million barrels per day.
Dangote said he had been surprised by the scale of investor interest, although he did not disclose subscription figures. The share sale is scheduled to close on October 13.
The offering could raise as much as $2.1 billion if demand exceeds the shares available, with lead financial advisers underwriting $400 million of the transaction.
Investor enthusiasm has also placed pressure on Nigerian financial technology platforms handling retail subscriptions.
Richmond Bassey, chief executive of investment platform Bamboo, said the company recorded a 350 percent increase in new accounts in the week before the offering opened, with demand accelerating further after its launch.
Dangote pushes ahead with Kenya refinery
Meanwhile, Dangote is preparing to extend his refining operations into East Africa, with construction of a 700,000-barrel-per-day facility planned near Kenya’s Lamu port.
The $16 billion project is scheduled for a groundbreaking ceremony on Wednesday, September 30, and is intended to supply refined petroleum products to Kenya and neighbouring countries.
Dangote said regional governments had been offered a combined 30 percent stake in the project, with participating countries allowed to spread their equity payments over four years.
Kenya and Rwanda are among the governments involved in discussions, with Rwanda seeking a 10 percent stake. Other countries have also expressed interest, although Dangote did not identify them.
The planned refinery will process crude oil from regional producers and international suppliers, including the Middle East and the United States.
Dangote said the facility would not depend on a single crude supplier, allowing it to process different grades of oil according to availability and commercial requirements.
The development is also expected to support petrochemical production and associated industries, with plans to construct pipelines connecting the refinery to one or two neighbouring countries.
Land dispute threatens construction timetable
The Kenyan project faces legal challenges from local residents and environmental campaigners concerned about its impact on communities and the surrounding area.
A Kenyan court has ordered the existing conditions at the proposed refinery site to be maintained pending an October 14 hearing in a land rights case brought by 133 residents of Chandavai in Lamu County.
The residents say the land is their ancestral property and that their families have lived and farmed there for generations.
Dangote Group said the ruling would not prevent Wednesday’s groundbreaking ceremony but acknowledged that it could affect activities at the site.
Dangote dismissed criticism of the development, arguing that some opposition came from traders whose businesses could face disruption as the refinery changes regional fuel supply arrangements.
Despite the legal dispute, he expressed confidence that the project would proceed.
The Kenya investment forms part of Dangote’s broader strategy to increase Africa’s domestic refining capacity, reduce reliance on imported petroleum products and develop regional energy infrastructure.
