Dangote 1,000MW power plant plans could strengthen Kenya’s energy supply as the Lamu refinery project moves towards construction

Aliko Dangote, President of Dangote Industries, and the Kenyan government are exploring plans for a 1,000-megawatt liquefied natural gas power plant linked to Dangote’s proposed refinery in Lamu, Kenya, as the two sides seek to strengthen electricity supply and support a wider industrial hub on the country’s coast.

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The proposed facility would represent a significant expansion from the original plan for a 500MW captive power plant intended primarily to serve the refinery.

Kenya is now considering doubling the capacity to 1,000MW, with the additional electricity potentially supplying the planned Lamu Special Economic Zone and other industrial users.

David Ndii, head of President William Ruto’s economic advisory team, said the expanded plant could generate more electricity than the refinery itself requires, creating the possibility of selling surplus power to Kenya’s national grid.

“[Dangote’s] Lagos refinery has a 500MW power plant, and this one, we are proposing to do 1,000MW so that we also power the SEZ,” Ndii told The Africa Report.

The proposal would place power generation alongside the refinery and planned petrochemical facilities, creating an integrated industrial and energy complex in Lamu.

The proposed plant is expected to run on LNG, with Tanzania emerging as a potential source of the natural gas needed to fuel the facility.

A cross-border gas arrangement could involve LNG being transported by tanker to Lamu or eventually delivered through dedicated pipeline infrastructure, although the precise supply model has yet to be finalised.

The power negotiations come as Dangote advances plans for a major refinery in Lamu, with construction scheduled to begin on September 30, 2026.

The refinery is expected to have a processing capacity of 700,000 barrels of crude oil per day and is projected to cost about $16 billion to $17 billion.

Reuters reported that the project faces significant challenges, including securing reliable crude supplies and raising the capital required for construction.

The Kenyan government sees the refinery as a potentially transformative investment that could reduce the country’s dependence on imported refined petroleum products while establishing Lamu as a regional energy and industrial centre.

The wider development is expected to include manufacturing, storage, logistics and petrochemical infrastructure around the refinery.

The proposed 1,000MW power plant would add another important dimension to that strategy. Instead of building electricity infrastructure solely for the refinery, the larger installation could provide power for surrounding industries and the planned special economic zone.

Kenya has increasingly sought to diversify its electricity mix and reduce exposure to fluctuations in hydropower generation, particularly during periods of drought.

Natural gas could provide a more predictable source of electricity alongside Kenya’s growing wind, solar and geothermal capacity.

For Tanzania, the proposed project could create a new market for its natural gas resources and deepen energy links with its northern neighbour.

The possibility of moving Tanzanian gas into Kenya would also give the project a regional dimension, potentially encouraging investment in LNG handling, transportation and other supporting infrastructure.

However, the 1,000MW proposal remains under negotiation and is not yet a completed power project.

A final investment decision would depend on several outstanding issues, including the availability and price of gas, financing, environmental approvals and the terms of any power purchase agreement with Kenya Power.

The refinery itself also faces substantial financing and supply challenges.

Dangote has recently confirmed that the Lamu refinery will be his largest refining investment outside Nigeria.

The planned facility is designed to replicate aspects of the industrial model used at the Dangote Petroleum Refinery in Lagos, which has become a major player in Nigeria’s fuel market.

The Nigerian refinery has reached a processing capacity of about 650,000 barrels per day and is being expanded towards 1.4 million barrels per day.

Dangote is also preparing an initial public offering for the Nigerian refinery business to raise funds for its expansion and related investments.

That broader expansion programme makes the financing of the Kenyan project an important consideration for investors and regional governments.

Analysts have already pointed to the scale of capital required for the Lamu refinery, particularly as Dangote simultaneously pursues major investments in Nigeria.

The Kenyan government, meanwhile, is positioning the Lamu development as part of a broader economic transformation of the coastal region.

The refinery would sit within the wider Lamu Port-South Sudan-Ethiopia Transport corridor, a major infrastructure initiative intended to improve trade and transport links between Kenya and neighbouring countries.

If the proposed power plant proceeds at 1,000MW, its significance could extend beyond Dangote’s refinery.

A large gas-fired generation facility connected to industrial demand could help provide a reliable together several ambitions at once: expanding fuel production, improving electricity availability, developing coastal industry electricity base for new businesses in Lamu while creating a new route for Tanzanian gas into the Kenyan market.

The project therefore brings together several ambitions at once: expanding fuel production, improving electricity availability, developing coastal industry and strengthening East African energy trade.

Yet the scale of those ambitions also means the challenges are considerable.

For now, the 1,000MW proposal remains part of ongoing discussions between Dangote Industries and Kenyan authorities.

The outcome of those negotiations, together with the refinery‘s financing, gas supply arrangements and regulatory approvals, will determine whether the planned Lamu energy hub becomes a reality.

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With construction of the refinery expected to begin later this month, attention is now turning to whether the ambitious power component can move from negotiation to a bankable project capable of supporting Kenya’s wider industrial plans.