African industrialist Aliko Dangote has expressed confidence that plans for the proposed $16 billion Lamu Refinery in Kenya will proceed despite a court order restricting activities on portions of the project site that are the subject of a land dispute.
The Malindi Environment and Land Court ordered parties to maintain the existing status quo on the disputed land until October 14, when the case is expected to return for hearing.
The dispute was brought before the court by 133 residents of Chandavai in Lamu County who claim that parts of the land designated for the refinery constitute ancestral property occupied and cultivated by their families for generations.
Under the interim order, activities including clearing, excavation, fencing, demolition and construction are temporarily prohibited on the affected portions of land.
The court, however, declined an application seeking to stop the refinery’s groundbreaking ceremony scheduled for September 30.
Dangote Group said the distinction meant the ceremony could proceed, although physical activities on the disputed portions of the site would remain subject to the court order.
Speaking during an investor event in Nairobi, Dangote played down concerns that the legal dispute could derail the investment, describing such challenges as part of the difficulties encountered in executing major projects across Africa.
He maintained that the company was prepared to defend the project through the appropriate legal process.
The proposed refinery is estimated to cost about $16 billion and is projected to process approximately 700,000 barrels of crude oil daily when completed.
The facility, targeted for completion by 2030, is expected to process crude from Kenya’s Turkana oilfields as well as supplies from elsewhere in Africa.
Supporters of the project believe it could significantly reduce East Africa’s dependence on imported refined petroleum products while strengthening regional energy security.
The residents challenging the development are seeking recognition of their interests in the disputed land and compensation. They have also raised concerns about the potential consequences of the project for their property and livelihoods.
The African Energy Chamber has meanwhile called for a speedy resolution of the dispute.
Its Executive Chairman, NJ Ayuk, said legitimate concerns surrounding land ownership, compensation and environmental compliance must be addressed under Kenyan law, while cautioning against allowing prolonged litigation to indefinitely stall the refinery.
Ayuk argued that East Africa needed greater refining capacity to reduce its exposure to disruptions in international petroleum markets.
The chamber noted that the region has depended heavily on imported refined products since the shutdown of Kenya Petroleum Refineries in 2013.
It cited the Dangote Petroleum Refinery in Nigeria as evidence of the potential benefits of expanding Africa’s domestic refining capacity.
Ayuk urged all parties to find a solution that protects affected communities while allowing the proposed investment to proceed. The October 14 hearing is therefore expected to be significant in determining how quickly physical development of the disputed sections of the Lamu project can advance
