Nairobi, Aug. 10 -- Africa's richest man, Aliko Dangote, will rely heavily on debt to finance the proposed multi-billion shilling oil refinery in Lamu, with construction of the project expected to begin by October this year.

Mr Dangote disclosed that 70 percent of the estimated $16 billion (Sh2.07 trillion) project will be financed through debt, replicating the highly leveraged funding model commonly used for large infrastructure projects. The remaining 30 percent will be financed through equity.

This means lenders will provide roughly Sh1.45 trillion, while shareholders-including Mr Dangote and other investors-will inject about Sh621 billion.

Debt is often preferred to equity for large infrastructure and industrial projects because it...