Kampala, Uganda I HABARI DAILY I In a significant step towards achieving energy independence, Uganda has initiated final negotiations for the financing and construction of its USD 4 billion domestic refinery. Alpha MBM Investments from the United Arab Emirates has been selected as the preferred bidder by the Ugandan government.
Ms. Ruth Nankabirwa, Uganda’s Minister of Energy and Mineral Development, made this groundbreaking announcement during the annual media briefing in Kampala recently, where she provided an up-to-date overview of the country’s transformative oil and gas project. The selection of Alpha MBM Investments followed a thorough evaluation process, and negotiations commenced on 16th January 2024.
Alpha MBM Investments, led by His Highness Sheikh Mohammed bin Maktoum bin Juma Al Maktoum, a senior member of the Dubai Royal Family, was chosen after the government considered private sector and public sector ownership options for the refinery. The Memorandum of Understanding (MoU) was signed on 22nd December 2023, outlining cooperation and negotiation terms for the Refinery Project.
Minister Nankabirwa highlighted the strategic importance of the refinery, stating, “The construction of the refinery at Hoima, which will process 60,000 barrels of oil daily, in the west of the country will transform Uganda’s energy security profile as it will no longer rely on neighboring countries for transshipment of critical fuel supplies.”
The refinery is a key component of Uganda’s Energy Transition Plan and will produce Liquefied Petroleum Gas (LPG), supporting the country’s ‘clean cooking’ initiative. The Minister emphasized Uganda’s commitment to developing its oil and gas resources responsibly, transparently, and profitably.
As part of the broader oil and gas projects in Uganda, progress updates were provided. The Kingfisher Development Area, one of the licensed production areas, is well ahead of schedule, reaching 21 per cent progress. Additionally, the construction of Kabalega Airport, a crucial logistics hub for the oil and gas project, is at 95 percent completion and will become the country’s second international airport.
Ms. Nankabirwa underscored Uganda’s adherence to high environmental and regulatory standards, projecting significant contributions to the country’s GDP and job creation. The Cop28 Climate Conference in Dubai reaffirmed the global long-term need for oil and gas, securing Uganda’s earnings when first oil is produced in 2025.
The Minister also announced the issuance of a license for the construction of the Kingfisher Development Area Natural Gas conversion facility in Kikuube District to CNOOC (U) Limited. This facility is expected to produce over 20,000 tonnes annually at its peak, contributing to Uganda’s gas utilization efforts.
With over 90 percent of Ugandans impacted by oil and gas developments accepting relocation financing or new land and houses, the Minister provided assurance on compensation arrangements.
The progress in the refinery project is a significant milestone for Uganda, signaling a transformative phase towards energy self-sufficiency and economic prosperity. The government’s commitment to sustainable development and responsible resource utilization remains unwavering as it forges ahead in the dynamic landscape of the oil and gas sector
