Uganda has finalized an oil refinery agreement with UAE-based Alpha MBM Investments, granting the firm a 60% stake in a planned crude oil refinery in Kabaale, Hoima District.
The agreement, signed on Saturday, marks a significant milestone in Uganda’s energy development strategy, President Yoweri Museveni’s office announced in a statement.
The Uganda National Oil Company (UNOC), a state-owned entity, will retain the remaining 40% stake in the refinery, which is designed to process 60,000 barrels of crude oil per day.
The facility is expected to strengthen Uganda’s refining capacity, reduce dependence on imported petroleum products, and boost the country’s economic growth.
In addition to the refinery deal, Uganda and investors from the United Arab Emirates signed five other agreements across various sectors, underscoring the strengthening economic ties between the two nations.
While details of these additional agreements were not immediately disclosed, officials indicated they align with Uganda’s broader ambitions to attract foreign investment and enhance industrialization.
The agreement follows months of negotiations that began earlier this year. Energy Minister Ruth Nankabirwa had previously stated that discussions with Alpha MBM Investments over key commercial terms commenced on January 16, with an initial timeline of three months for completion.
Alpha MBM Investments, the UAE-based investment firm involved in the project, is led by Sheikh Mohammed bin Maktoum, a member of Dubai’s royal family.
The company has interests in energy, infrastructure, and real estate, positioning it as a strategic partner in Uganda’s oil and gas sector.
The planned $4 billion refinery is a cornerstone of Uganda’s nascent hydrocarbons industry. With the country holding an estimated 6.5 billion barrels of crude oil reserves, of which about 1.4 billion barrels are recoverable, the refinery is expected to play a crucial role in unlocking the full potential of Uganda’s oil sector.
The project aims to process and supply refined petroleum products to both the domestic and regional markets, reducing reliance on imported fuels and stabilizing prices.
President Museveni has long advocated for in-country oil refining to maximize economic benefits for Ugandans.
The government views the refinery as a key component in its long-term energy strategy, ensuring energy security while creating jobs and spurring industrial development.
Analysts note that the involvement of an international investor like Alpha MBM Investments could accelerate the refinery’s implementation, providing technical expertise and financial backing.
However, challenges remain, including the need for supporting infrastructure such as pipelines and transportation networks to efficiently deliver crude oil to the refinery and distribute refined products.
The refinery project is also expected to complement the ongoing construction of the East African Crude Oil Pipeline (EACOP), a 1,443-kilometer pipeline set to transport crude oil from Uganda’s oil fields in the Albertine Graben to the Tanzanian port of Tanga for export.
Uganda’s broader oil development agenda includes both refining and exporting crude oil, balancing domestic energy needs with international market opportunities.
With the signing of this agreement, Uganda moves closer to realizing its long-standing vision of becoming a key player in Africa’s energy sector.
Government officials have expressed confidence that the refinery will be operational within the next few years, transforming the country’s oil industry and contributing to national economic growth.