Museveni backs Lamu refinery but holds off Uganda investment

President Yoweri Museveni has backed the construction of a mega refinery at Lamu in Kenya but said Uganda will not commit money to the project until it clarifies the fate of an earlier regional refinery plan in Tanga, Tanzania.

Speaking on Wednesday at the groundbreaking of the $16 billion Dangote East Africa Petroleum Refinery in Lamu, President Museveni said he had previously discussed the possibility of establishing a regional refinery with Nigerian businessman Aliko Dangote, Kenyan President William Ruto and Tanzanian President Samia Suluhu Hassan.

He said Uganda would first establish whether the Tanga project, which had earlier been considered as a regional refining hub, remains on course before deciding whether to invest in the Lamu facility.

President Museveni’s position marks a shift from Uganda’s earlier indication that it was willing to take shares in a large regional refinery promoted by Mr Dangote. In May, State House said Uganda was ready to support the regional refinery and buy shares, when Tanga, Mombasa and Lamu were still being considered as possible locations.

The Dangote project has since settled on Lamu, with the $16 billion facility designed to process 700,000 barrels of crude oil a day. Construction is expected to take about 40 months.

President Museveni said East Africa could accommodate more than one refinery, arguing that the facilities could complement rather than compete with each other.

He said Uganda had long supported increased refining capacity across Africa as a way of reducing dependence on imported petroleum products and retaining more value from the continent’s natural resources.

He also linked Uganda’s decision to develop its own refinery to the need to ensure that the country’s oil resources are not entirely exported as crude

Uganda’s refinery at Kabaale in Hoima is planned to process 60,000 barrels of crude oil per day. The country expects commercial oil production to begin before the end of 2026, with crude exports planned through the 1,443-kilometre East African Crude Oil Pipeline to Tanga.

The proposed Tanga refinery formed part of earlier discussions around a wider regional energy hub linked to the EACOP route.

However, the status of that refinery has become less clear after Mr Dangote selected Lamu for his large-scale project.

Mr Dangote told the ceremony that the Lamu refinery would help East Africa process more of its own resources rather than depend heavily on imported petroleum products.

He has invited regional countries that have not yet committed to participate in the project, saying the investment would serve a market extending beyond Kenya.

Mr Dangote also compared the planned construction schedule with Uganda’s refinery project, saying the 40-month timeline for Lamu could put the Kenyan facility ahead of Uganda’s 60,000-barrel-per-day refinery.

He urged governments to be cautious when selecting investors, saying projects should be backed by developers with the capacity to deliver.

His comments come after Uganda’s refinery project went through several stalled arrangements with different developers and investors.

The latest developer is Alpha MBM Investments LLC of the United Arab Emirates, which is partnering with Uganda National Oil Company to develop the Hoima refinery.

The Lamu project therefore adds another major refinery to a regional petroleum landscape in which Uganda is also pursuing domestic refining while Tanzania remains linked to Uganda’s oil export infrastructure through Tanga.

Kenyan President William Ruto said the Lamu refinery fits into Kenya’s wider plans under the Lamu Port-South Sudan-Ethiopia Transport Corridor, or LAPSSET.

He said the project would strengthen the region’s petroleum value chain and support industrialisation.

Mr Ruto also cautioned Kenyan officials against imposing demands on investors that could discourage investment.

The Lamu refinery is planned at 700,000 barrels per day, making it comparable in capacity to the Dangote refinery in Nigeria. The Nigerian facility has a capacity of about 650,000–700,000 barrels per day.

The scale of the Kenyan project has raised questions about how several large refineries could operate within the same regional market.

For Uganda, the immediate question is whether to concentrate on its planned 60,000-barrel-per-day domestic refinery, participate in the Lamu project, or retain its earlier interest in a possible Tanga refinery.

President Museveni, however, said the existence of several refineries should not necessarily be viewed as a problem.

He argued that East Africa’s growing petroleum demand and the need to process its own resources could support multiple facilities if the regional market becomes more integrated.