The Lamu Lesson for Investors in Kenya
The proposed Dangote refinery in Lamu is a reminder of a fundamental reality for major investors in Kenya: having access to land on paper does not necessarily mean that a project is land-ready.
Dangote Group's proposed refinery, reportedly valued at approximately US$15–16 billion and designed to process about 700,000 barrels of crude oil per day, represents one of the largest potential private investments in Kenya.
Yet, as preparations for the project advance, 133 residents of Chandavai have moved to court over LR No. 13061 in the Hindi/Manda Magogoni area.
The residents claim that their families have occupied and used portions of the land for generations and point to homes, farming, grazing, graves, religious sites and other community interests on the property. The Environment and Land Court has issued interim orders preserving the status quo over the disputed parcel pending further consideration of the matter.
The dispute is yet to be finally determined. However, for investors, the significance lies not merely in who ultimately succeeds in court. It lies in the fact that a major investment can reach an advanced stage and still face uncertainty over the land on which it is intended to operate.
Lamu has seen this before
The proposed 1,050 MW Amu Power coal plant at Kwasasi provides an important comparison.
Land earmarked for that project became the subject of disputes concerning ownership, compensation and occupation. In Fredric Kimani Kariuki v Amu Power Company Limited, the Environment and Land Court confronted a purported private transaction involving land described as community land.
The case highlighted an important principle: community land cannot simply be converted into private land through informal agreements without compliance with the constitutional and statutory regime governing community land.
Amu Power subsequently faced an even greater challenge in relation to its environmental approvals.
In Save Lamu v NEMA & Amu Power Company Limited, the National Environment Tribunal cancelled the project's environmental licence. The decision was ultimately upheld by the Environment and Land Court in 2025.
Among the issues considered were deficiencies in public participation, environmental assessment, consideration of project alternatives and compliance with the broader environmental framework applicable to the LAPSSET corridor.
The message was clear: government support, financing arrangements and even substantial investment expenditure cannot cure defects in land acquisition, environmental approval or public participation.
A title search is no longer enough
Traditional land due diligence often concentrates on the register:
Who owns the property?
Are there encumbrances?
Is the title genuine?
For large infrastructure and industrial projects, those questions are necessary but no longer sufficient.
An investor must also establish:
Who actually occupies the land?
Who cultivates or grazes on it?
Are there customary or community interests?
Will livelihoods be disrupted?
Are there graves, cultural sites, access routes or religious sites within the project footprint?
Have affected persons been properly identified and compensated?
Where compulsory acquisition is involved, Kenyan law does not permit an investor simply to negotiate around the statutory process. The National Land Commission and the relevant national or county government must act within the Constitution and the Land Act.
Similarly, where community land is involved, the Community Land Act introduces an entirely different framework for dealing with ownership, conversion, compensation and community decision-making.
The project boundary is not the risk boundary
The LAPSSET litigation in Mohamed Ali Baadi v Attorney General provides another important lesson.
The Court recognised that major infrastructure can interfere with rights and livelihoods even where the affected persons do not own the actual project site. Traditional fishermen, for example, could suffer economic displacement through loss of access to fishing areas and landing sites.
For investors, this means that the assessment of persons affected by a project cannot end at the boundary shown on a survey plan.
A refinery may affect fishermen.
A road may affect grazing routes.
A pipeline may interfere with access to farms.
A port may alter traditional fishing grounds.
A security buffer may separate communities from resources on which their livelihoods depend.
Land due diligence must therefore consider both physical displacement and economic displacement.
What should investors do differently?
For major projects, land risk should be dealt with before construction and preferably before financial close.
The investor should undertake both a legal cadastre and a social cadastre.
The legal cadastre establishes the formal status of every parcel: private land, public land, registered community land or potentially unregistered community land.
The social cadastre identifies the people actually using and depending upon that land, including occupants, farmers, tenants, businesses, pastoralists and persons relying on adjoining resources.
Compensation, resettlement and livelihood issues should then be resolved before possession is taken.
Public participation must also be genuine and properly documented. The Amu Power litigation demonstrates the danger of treating consultation as a meeting held after the substantive project decisions have already been made.
Investors should additionally establish credible grievance and alternative dispute-resolution mechanisms capable of resolving claims before they become applications for conservatory orders or injunctions.
The commercial lesson
Community engagement, environmental compliance and proper land acquisition are sometimes viewed as costs that delay development.
Lamu demonstrates that the opposite may be true.
The expensive sequence is:
Design → Finance → Mobilise → Clear Land → Discover Claims → Litigate.
The safer sequence is:
Identify → Classify → Consult → Compensate → Resolve → Licence → Finance → Develop.
The distinction is ultimately between owning land and having bankable land.
A title may establish a legal interest. It does not necessarily establish that an investor can peacefully occupy, finance and develop the site without interruption.
The Dangote proceedings remain unresolved, and the residents' claims will ultimately require judicial determination. Nevertheless, the wider lesson is already clear.
For major investments in Kenya, particularly infrastructure, energy, mining and large-scale industrial developments, the title deed should be treated as the beginning of land due diligence—not the end.