Dangote’s $16 Billion Kenya Refinery Hits Legal Roadblock

A Kenyan court has temporarily halted construction of Aliko Dangote’s planned $16 billion oil refinery after local residents challenged the project over alleged threats to their land, livelihoods and environment.

Judge Jane Onyango ordered that the “status quo prevailing” be maintained in Lamu, on Kenya’s northeastern coast, where the refinery is set to be built. The court is scheduled to issue further directions on Oct. 14, according to an order issued Friday.

The ruling prevents construction from beginning before the next court hearing, George Wakahiu, a lawyer representing the project’s local opponents, told Bloomberg. Groundbreaking had been planned for Sept. 30.

The case was filed by 133 petitioners who describe themselves as farmers and other inhabitants of the Lamu area. They argue that the development could deprive them of their property rights and lead to forced evictions, destruction of property and loss of land without an adequate resettlement plan.

The petitioners also allege that Dangote and Kenyan authorities have not complied with environmental requirements, including conducting a mandatory environmental impact assessment before implementing a major project.

They further contend that the refinery breaches constitutional provisions requiring meaningful public participation in major developments.

The allegations have not yet been adjudicated, and the temporary order does not represent a final ruling on the merits of the case.

The legal challenge could delay a project intended to reduce East Africa’s dependence on imported refined petroleum products. Its strategic importance has increased amid disruptions to global oil supplies and sharply higher fuel prices.

The refinery forms part of the Lamu Port-South Sudan-Ethiopia Transport corridor, a multibillion-dollar regional infrastructure programme encompassing railways, pipelines, roads, airports and a power plant.