Uganda has chosen United Arab Emirates-based Alpha MBM Investments to own a 60% stake in its planned refinery.
The previous consortium ran out of time, losing its licence for the Hoima refinery in June 2023. Uganda Minister of Energy and Mineral Development Ruth Nankabirwa, speaking today at a press conference, announced the choise of the Emirati company.
“I’m happy to report that negotiations commenced on January 16. I expect these will conclude within three months,” Nankabirwa said. The minister said a draft oil supply agreement was waiting for final comments.
Uganda National Oil Co. (UNOC) would hold the remaining 40% in the $4 billion plant. Previously, the country has talked about building the 60,000 barrel per day facility in two phases.
Alpha MBM is led by a Dubai royal, Sheikh Mohammed bin Maktoum bin Juma Al Maktoum. The company signed a memorandum of understanding (MoU) on the refinery on December 22, 2023.
Nankabirwa said the previous group had held the licence for four years and nine months, covering a number of extensions. She praised the speed at which Alpha MBM was willing to participate.
International support
There had been a problem securing funds for the project, she said. “Banks have started coming in again, they had pulled out of financing such projects. Countries like Uganda have spoken and indicated their seriousness in continuing to develop fossil fuels. We pray the new partner will be able to fast track the development of this new facility.”
A ministry official said Alpha MBM had the required financial capability and progress would be swift. “At the time of signature [on the refinery agreement]” the company will take the final investment decision (FID). “Immediately we sign the agreements we shall see some works commence.”
© Supplied by Ugandan energy minisIn the meantime, Nankabirwa highlighted the importance of energy security for the Ugandan government. The Lake Albert development is due to reach first oil in 2025, she noted, “but I’m concerned about today, about security of supply and affordability”.
UNOC has applied to the Kenyan authorities for the right to act as an importer of petroleum products. Legal complaints have bogged the company’s efforts down. The minister said the next hearing had been pushed back from this week to February.
“We don’t know what went wrong,” Nankabirwa said. The Kenyan government has expressed support for UNOC’s bid, she continued.
EACOP
The minister has previously explained that China’s Sinosure has come in to support the East African Crude Oil Pipeline (EACOP).
Speaking at the press conference, Nankabirwa said the Chinese agency was to fill a “gap” of $1.2 billion. “By June, I’m sure we will have got the $1.2bn we expected.”
The price of the pipeline has increased, with officials noting the impact of inflation and supply constraints. Project backers had estimated EACOP would cost $4bn, but the ministry today has guided to $5bn.
“The critiques are continuing so we don’t move,” Nankabirwa said. “I’m not worried, I am just annoyed”, the minister said in reference to criticism from environmental NGOs. “Uganda is a sovereign state, you cannot dictate to us. I pray I don’t come across such people.” Those that criticise Uganda’s plans for hydrocarbon development are “shameless … sycophants”.
Recommended for you
