Namibia–Botswana Eye a $4bn Joint Oil Refinery

An Oil Refinery in Africa (image source)

Namibia and Botswana are exploring a jointly owned oil refinery, a marquee idea that has rippled across regional energy circles with price tags of about $4 billion and siting whispers around Walvis Bay. Officials and industry platforms describe it as a bid to cut reliance on imported fuels, capture more value from crude flows linked to Namibia’s offshore finds, and bolster energy security for the inland Southern African market.

Public statements and trade-press reporting since May confirm high-level talks and feasibility exploration for a joint refinery venture. Energy Capital & Power, FurtherAfrica and other industry outlets have chronicled the agenda: joint funding options, scale between 30,000–60,000 barrels/day in an initial phase, and regional distribution using Namibia’s ports and Botswana’s demand centre. None of these constitute a final investment decision (FID), but they mark a shift from coffee-table idea to pre-feasibility work.

A parallel development complicates the landscape: Nigeria’s Dangote Refinery plans to build 1.6 million barrels of fuel storage at Walvis Bay to flood Southern African markets with refined product. If Dangote’s tanks land first, it could reshape supply dynamics—potentially undercutting the economics of a new, capital-intensive refinery unless the Namibia–Botswana project is sized and sequenced carefully. Reuters reporting on Dangote’s Namibia move is specific on capacity and location, suggesting construction could start soon.

A right-sized plant could anchor fuel security for Botswana and Namibia, stabilize prices against external shocks, and catalyse downstream jobs in blending, logistics, and maintenance. It could also create strategic stock capacity and leverage Namibia’s burgeoning upstream narrative (Orange Basin discoveries) into industrial policy. For Botswana, access to coastal refining plus pipeline/rail solutions would diversify away from sole dependence on imports routed via South Africa.

Risks are real. Refinery margins are cyclical; overcapacity in the region, especially with Dangote scaling up exports, can crush returns. Capital costs and debt terms will define pump-price pass-throughs; if financing is expensive, consumers pay. Environmental compliance—air emissions, wastewater, coastal risks—will be scrutinized by civil society and lenders. And execution risk is non-trivial: EPC selection, feedstock certainty, product slate (diesel vs gasoline bias), and integration with storage and pipelines will make or break viability.

Analysts say the next steps in the project will hinge on a formal MoU with site selection and a named transaction advisor; commissioning of a bankable feasibility study (BFS) with transparent assumptions; clarity on feedstock—imported crude vs future local barrels—and offtake agreements; and how the project co-exists or competes with Dangote’s Walvis Bay footprint. Until then, “$4 billion refinery” is a serious exploration, not a signed build.

They further reiterate that regional self-reliance in fuels is a compelling goal. If Namibia and Botswana convert political will into disciplined project prep—while sizing against Dangote’s looming presence—the refinery could be a cornerstone of a Southern African energy hub. If not, it risks becoming an expensive monument to good intentions.