Uganda has announced plans to fully fund its $4 billion oil refinery project through equity.
Energy Minister Ruth Nankabirwa stated that Uganda and its project partner, Alpha MBM Investments, a UAE-based firm, have decided to halt their search for international market financing.
The Uganda Refinery Project aims to construct a 60,000-barrel-per-day refinery in Kabaale, located in western Uganda’s Hoima District.
The project has faced multiple delays over the years, primarily due to challenges with securing financing.
At the end of 2023, Uganda signed an MoU with Alpha MBM Investments LLC to establish terms of cooperation and negotiation for the refinery.
The project requires an investment of at least $4 billion and is one of three significant oil and gas ventures, along with the EACOP and the upstream Tilenga and Kingfisher projects.
Uganda had initially projected the refinery’s funding to comprise 60% debt and 40% equity.
However, the government has now committed to financing the entire project through equity alone.
Meanwhile, another major regional oil project, the East African Crude Oil Pipeline (EACOP), has encountered similar delays and obstacles.
Earlier this year, Standard Bank, Africa’s largest lender, confirmed its intention to partially finance the controversial $5 billion EACOP project, despite opposition from environmental activists.
The EACOP project plans to build a 1,443-kilometer pipeline to transport crude oil from Uganda’s Lake Albert to the port of Tanga in Tanzania.
Uganda estimates the pipeline’s capacity at 216,000 barrels per day, with the potential to increase to 246,000 barrels per day.
