Lamu is emerging as a major industrial and energy hub, with plans for a $16 billion oil refinery by Dangote Group and a separate palm oil refinery and commercial plantations expected to accelerate development of the LAPSSET Corridor.

The two projects could transform Lamu Port from primarily a transport facility into an integrated centre for energy, manufacturing, agro-processing and logistics, while generating cargo and investment for the wider corridor linking Kenya with South Sudan, Ethiopia and other regional markets.

Dangote Group plans to build a refinery with a capacity of up to 700,000 barrels per day (bpd), matching the capacity of its flagship refinery in Nigeria. The company has offered East African countries a 30 per cent equity stake, estimated at $1.5 billion.

Kenya has expressed interest in investing $500 million for a 10 per cent stake, with Ethiopia and Rwanda expected to take up the remaining regional share. The project is expected to have a 70:30 debt-to-equity financing structure.

The refinery could become a major anchor for LAPSSET, generating demand for port services, pipelines, storage facilities, roads, railways and other logistics infrastructure.

Developing the crude supply network could revive one of LAPSSET’s original strategic objectives and provide South Sudan with an alternative route to international markets.

At the same time, Kenya is pursuing a second major investment in Lamu — a palm oil refinery and commercial plantations within the LAPSSET Special Economic Zone.

Malaysia-based CPF Investment has identified land in Witu for palm plantations, while discussions are under way with Kenyan authorities and Malaysian consultants on establishing the refinery.

The project could help reduce Kenya’s heavy dependence on imported palm oil. The country imports about one million tonnes annually, valued at nearly $1 billion (Sh129.4 billion), with about 90 per cent consisting of crude palm oil mainly sourced from Malaysia and Indonesia.

Local plantations and refining would retain more value within Kenya while creating opportunities across farming, processing, transport, storage and distribution. The project could also generate agricultural cargo for Lamu Port and support exports to regional markets.

The palm oil investment is being developed amid stronger Kenya-Malaysia economic ties. Malaysian authorities will offer technical expertise and palm oil seedlings, with plans in place to establish a trade support office in Nairobi.

Together, the two projects could provide LAPSSET with a diversified economic base. The Dangote refinery will anchor the corridor around energy and petroleum, while the palm oil project will support agriculture, manufacturing and agro-processing.

Their development could attract additional industries producing edible oils, soaps, cosmetics, chemicals, packaging and other products. This would strengthen the LAPSSET SEZ and create employment for construction workers, farmers, transporters, contractors, suppliers and other businesses.

The scale of the planned investments, however, means the government will need to coordinate port development with roads, railways, pipelines, electricity, water, industrial land and other infrastructure.

Ensuring that local communities benefit through jobs, skills development, farming opportunities and business contracts will also be critical to the projects' long-term success.

If implemented, the Dangote refinery and palm oil complex could fundamentally change the economic role of Lamu.

Instead of serving primarily as the coastal endpoint of LAPSSET, Lamu could become the industrial engine of the corridor, linking energy production, agro-processing, manufacturing and logistics with markets across East and Central Africa.

The immediate challenge is to convert the ambitious investment plans into functioning infrastructure. If that happens, the projects could provide the cargo, industries and investment needed to turn LAPSSET into a fully fledged regional economic corridor.