East Africa’s Energy Race Sparks Billion-Dollar Rivalry

The proposed Lamu facility, designed to process 700,000 barrels per day, far exceeds the region's current demand of 450,000 barrels. While intended to serve Kenya, Uganda, Rwanda, Burundi, and the DRC, the project’s rollout was marred by diplomatic friction. Tanzanian President Samia Suluhu Hassan publicly rebuked Kenyan President William Ruto after he initially announced the facility would be located in her country without prior consultation. Following the fallout, Dangote’s team ultimately selected Lamu as the site, prompting Kenya to pledge 21.5 billion shillings in seed capital to secure the deal.

In a direct counter-move, Tanzania and Uganda joined forces with energy trader Vitol Bahrain to develop a $20 billion energy hub in Tanga. This project leverages the nearly complete East African Crude Oil Pipeline, providing landlocked nations an alternative fuel corridor that bypasses Kenyan infrastructure. Uganda is simultaneously hedging its risks by pursuing a $4 billion, UAE-backed refinery in Hoima, aiming for domestic self-sufficiency by 2030.

This infrastructure race mirrors the 2014 collapse of a joint pipeline deal, when Uganda abandoned a Kenyan route in favor of a Tanzanian alternative. Tensions are further compounded by competing transport initiatives: Kenya is racing to complete the Malaba rail link by 2027 to maintain its grip on trade, while Tanzania is aggressively expanding its own electrified Standard Gauge Railway to capture traffic from the Northern Corridor. These overlapping, costly projects now cast doubt on the viability of the East African Community’s pursuit of unified regional development.