Uganda’s national oil company is planning to secure up to $2 billion in financing from a subsidiary of commodities trader Vitol to support key infrastructure developments, according to a finance ministry official.
Earlier this year, the government signed an agreement with UAE-based Alpha MBM Investments to develop a $4 billion crude oil refinery with a capacity of 60,000 barrels per day. Under the arrangement, Alpha MBM will hold a 60% equity stake, while UNOC will retain 40%.
Uganda is targeting the start of commercial oil production next year from fields in the western part of the country.
UNOC intends to obtain the seven-year loan from Vitol Bahrain EC at an interest rate of 4.92%, junior finance minister Henry Musasizi told parliament.
Vitol Bahrain EC currently operates in Uganda as UNOC’s exclusive supplier of refined petroleum products, which UNOC then distributes to domestic fuel retailers.
Musasizi sought parliamentary approval for the credit facility, which lawmakers subsequently endorsed by a majority vote.
He said the financing provides access to alternative funding sources to advance priority projects and support the development of national infrastructure.
In addition to the refinery, the funds will be allocated to road construction, development of a petroleum products storage terminal, and the extension of a fuel pipeline from western Kenya to Kampala.
source: www.reuters.com
African Energy Council