Uganda’s National Oil Company Targets $2 Billion Vitol Loan to Fund Refinery and Energy Infrastructure
Uganda’s national oil company, the Uganda National Oil Company (UNOC), is seeking to secure up to $2 billion in financing from Vitol Bahrain EC, a subsidiary of global commodities trader Vitol, to support major energy and infrastructure projects, according to a senior official at the Ministry of Finance.
Earlier this year, the Ugandan government signed an agreement with UAE-based Alpha MBM Investments to develop a $4 billion crude oil refinery with a planned capacity of 60,000 barrels per day. Under the agreement, Alpha MBM will hold a 60 percent equity stake in the project, while UNOC will retain the remaining 40 percent.
Uganda is targeting the start of commercial oil production in 2026 from oilfields located in the western part of the country, as the country advances development of its upstream and midstream infrastructure.
Junior Minister of Finance Henry Musasizi told parliament that UNOC plans to obtain a seven-year loan from Vitol Bahrain EC at an interest rate of 4.92 percent. Vitol Bahrain EC currently operates in Uganda as UNOC’s exclusive supplier of refined petroleum products, which UNOC distributes to domestic fuel retailers.
Musasizi sought parliamentary approval for the proposed credit facility, which was subsequently approved by lawmakers through a majority vote.
He said the financing will provide Uganda with access to alternative sources of funding to advance priority projects and accelerate the development of critical national infrastructure.
In addition to the refinery project, the funds are expected to be used for road construction, the development of a petroleum products storage terminal, and the extension of a fuel pipeline from western Kenya to Kampala.
