Uganda Finalises Funding Talks with New Refinery Investors - Africa’s premier report on the oil, gas and energy landscape.

Uganda Finalises Funding Talks with New Refinery Investors  

Final negotiations for the financing and construction of Uganda’s $4Billion domestic refinery began on January 16, 2024, after Alpha MBM Investments from the United Arab Emirates was chosen by the government of Uganda as preferred bidder.

The breakthrough was announced by Ruth Nankabirwa, Uganda’s Minister of Energy and Mineral Development, at the first of a series of press conferences due to run quarterly giving up-to-date overview of the country’s transformative oil and gas project.

As a strategic investor in the 60,000Barrels Per Stream Day facility, Alpha MBM Investments will replace the Albertine Graben Energy Consortium (AGEC), whose Project Framework Agreement (PFA) was refused extension after it expired in June 2023.

After the AGEC had been shown the door for apparently lacking a sense of urgency, Ugandan President Yoweri Museveni called for renewed search for a new lead investor.

“The Ministry of Energy and Mineral Development engaged stakeholders to develop a strategy for the refinery project and received Expressions of Interest (EOIs) from several potential investors and evaluated,’’ Mrs. Nankabirwa said.

Four investment groups expressed interest in the refinery project but Alpha MBM, which began preliminary talks with the Ugandan government last September, was successful.

“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”, the minister told reporters.

“I am happy to report negotiations of the key commercial agreements between the Government and Alpha MBM Investments LLC commenced on 16th January 2024 and are expected to be concluded within three months,’’ Nankabirwa explained.

Alpha MBM is a UAE-based investment house led by His Highness Sheikh Mohammed bin Maktoum bin Juma Al Maktoum, a member of the Dubai Royal Family.

Alpha MBM is a pioneering investment company and describes Uganda as “an untapped market with the power to create opportunities where none were perceived’’, the Minister noted.

Final talks began between the two sides on January 16 in Kampala for what will be East Africa’s first major refinery, ending the region’s reliance on refined products imported expensively from overseas.

“Since the landmark discovery of oil in 2006, Uganda has upheld the highest environmental, industrial, legislative, and regulatory standards,’’ she said.

And the construction of the refinery at Hoima in the west of the country will transform Uganda’s energy security profile as it will no longer rely on neighbouring countries for transshipment of critical fuel supplies.

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