Uganda has announced plans to fully finance its $4 billion oil refinery project in Hoima District using equity, abandoning earlier plans to seek international market financing.
Energy Minister Ruth Nankabirwa revealed that the government, in partnership with UAE-based Alpha MBM Investments, has opted to proceed without external debt financing.
This decision marks a significant shift from the original funding model, which projected a mix of 60% debt and 40% equity.
The Uganda Refinery Project aims to establish a 60,000-barrel-per-day refinery in Kabaale, western Uganda.
The initiative is part of three major oil and gas projects in the country, alongside the East African Crude Oil Pipeline (EACOP) and the upstream Tilenga and Kingfisher ventures.
Despite its importance, the refinery project has faced delays over the years due to financing challenges. In late 2023, Uganda signed a memorandum of understanding with Alpha MBM Investments to solidify cooperation on the project.
Meanwhile, the EACOP project, a $5 billion undertaking to transport crude oil via a 1,443-kilometer pipeline from Uganda’s Lake Albert to Tanzania’s port of Tanga, has also encountered setbacks.
Despite environmental opposition, Standard Bank confirmed plans to partially finance the pipeline earlier this year.
The pipeline is expected to transport 216,000 barrels of crude oil per day, with a future capacity of 246,000 barrels per day, further positioning Uganda as a regional oil and gas player.
