Final negotiations for the financing and construction of the greenfield refinery in Hoima commenced this month after the selection of the UAE-based firm
Ugandan Minister Ruth Nankabirwa revealed key developments about the domestic oil refinery project. (Credit: Petroleum Authority of Uganda)
The Petroleum Authority of Uganda has revealed that the Ugandan government has chosen UAE-based Alpha MBM Investments as the preferred bidder for a planned $4bn domestic oil refinery.
According to the regulator, final negotiations for the financing and construction of the greenfield refinery commenced this month after the selection of Alpha MBM Investments.
An announcement in this regard was made by Ugandan Minister of Energy and Mineral Development Ruth Nankabirwa at an annual media briefing. She stated that after evaluating private sector partners for the refinery, President Yoweri Museveni, on 30 June 2023, instructed the consideration of public sector ownership for the oil refinery project.
Alpha MBM is headed by Sheikh Mohammed bin Maktoum bin Juma Al Maktoum, who is serving as UAE’s Minister of Finance apart from being a senior member of the Dubai royal family.
The refinery, set to be built in Hoima in the western part of the country, will be capable of processing 60,000 barrels of oil daily. It is expected to transform the energy security landscape of Uganda.
Once operational, the facility will end Uganda’s dependence on neighbouring countries for the transshipment of crucial fuel supplies.
Apart from reducing costs associated with petrol, diesel, and other fuels, the oil refinery in Hoima will play a pivotal role in Uganda’s energy transition plan. It will produce liquefied petroleum gas, which is a crucial component for the country’s clean cooking initiative.
Nankabirwa said: “The Ministry of Energy and Mineral Development engaged stakeholders to develop a strategy for the refinery project and received Expressions of Interest (EOIs) from potential investors, including Alpha MBM Investments LLC, Africa Economic Aid Limited, Bakertilly Middle East Limited, and St. Ignatius Energy.
“After thorough consultations and evaluations by the government, a Memorandum of Understanding (MoU) was signed on 22nd December 2023 between the Government of Uganda and Alpha MBM Investments LLC from the United Arab Emirates, outlining cooperation and negotiation terms for the Refinery Project.”
In addition to the refinery, Uganda is progressing with the $6-8bn Tilenga and Kingfisher upstream projects and the $5bn East African Crude Oil Pipeline (EACOP) project.