Nigerian billionaire Aliko Dangote and Kenyan President William Ruto have launched construction of a $16 billion oil refinery in Lamu, a project designed to reduce East Africa’s reliance on imported refined petroleum products.

The refinery is planned to process up to 700,000 barrels of crude oil per day and is expected to be completed by 2030. Dangote is seeking to replicate the model of his refinery in Lagos, which has the same planned processing capacity and has helped Nigeria reduce its dependence on imported fuel.

The Lamu project is intended to serve a regional market whose annual demand for petroleum products is estimated at between 20 million and 30 million metric tons. Dangote has said the facility should help lower the region’s fuel import bill and conserve foreign currency while supporting the development of related industries, including petrochemicals and bitumen.

Regional governments have been offered a combined 30% stake in the refinery. Dangote has also said the project could create more than 50,000 jobs, while Kenyan authorities have put the potential number of jobs at around 60,000.

The project is being developed around Lamu Port, a key part of Kenya’s planned transport corridor linking the country’s northern regions and neighbouring states to the Indian Ocean. The refinery is expected to strengthen the port’s role as an industrial and logistics hub.

Engineers India Limited has secured a contract worth more than $450 million to provide project management and engineering services. Its responsibilities include engineering, procurement and construction management, as well as oversight of costs, schedules, quality and safety.

But the project faces several challenges. Questions remain over the availability of crude supplies and the region’s energy infrastructure. The refinery is expected to source crude from regional and international producers, including oil from East Africa.

The project is also facing a legal dispute over the land where the refinery is planned. A Kenyan court has ordered the parties to maintain the status quo at the site pending further proceedings in a case brought by local residents who claim ancestral rights to the land and have raised concerns over compensation and environmental assessments. Dangote has said the court ruling would not prevent the groundbreaking ceremony, although some activities at the site could be affected.

Dangote said the refinery is part of a broader effort to increase Africa’s capacity to process its own natural resources rather than exporting raw materials and importing finished products. The project is expected to become one of the largest planned refining investments in East Africa if construction proceeds according to schedule.