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Groundbreaking USD 4bn Refinery Deal between Uganda and UAE Investor

April 1, 2025

(3 Minutes Read)

Uganda has reached a significant agreement with UAE-based Alpha MBM Investments, granting the company a 60% share in a planned oil refinery in Kabaale, Hoima District, with a capacity of 60,000 barrels per day. The refinery will convert Uganda’s crude oil into various petroleum products, including gasoline, diesel, kerosene, jet fuel, and heavy fuel oils. The Uganda National Oil Company, a state-owned entity, will retain the remaining 40%. This deal marks a crucial advancement in Uganda’s USD 4 billion refinery project, a key component of its emerging oil sector.

The agreement was signed at State House Entebbe in the presence of President Museveni, who emphasized the importance of producing and exporting refined products instead of raw materials. The deal paves the way for the refinery’s design, construction, and operation, with construction expected to take three years, according to the Uganda National Oil Company (UNOC). This refinery aims to position Uganda as a regional hub for petroleum refining and distribution.

The Hoima Oil Refinery is part of Uganda’s strategy to maximize the benefits from its estimated 6.5 billion barrels of crude oil reserves in the Albertine Graben. The project is managed by the Uganda Refinery Holding Company (URHC), a subsidiary of UNOC. Originally proposed over a decade ago, the project faced delays due to financial issues and shifts in investor interest. The initial joint venture, led by the Albertine Graben Refinery Consortium (AGRC), which included American and Italian firms, ultimately fell through, leading the government to seek new investors.

Alpha MBM emerged as the preferred partner after a thorough due diligence process. The signing of the Implementation Agreement indicates a renewed commitment to expedite the project. The refinery will include necessary infrastructure such as a product pipeline, storage facilities, and access roads. Nearby, Hoima International Airport is being built to support logistics and future oil industry activities. The project is expected to create thousands of jobs, stimulate industrial growth, and open up opportunities for local suppliers.

The refinery will serve not only Uganda but also neighboring countries, including Rwanda, South Sudan, the eastern Democratic Republic of Congo (DRC), and parts of Kenya and Tanzania, which have shown interest in investing or purchasing refined products. The government has committed to ensuring the refinery is developed with a focus on environmental protection and community development, with land acquisition and resettlement processes largely completed.

Once operational, the refinery is projected to significantly reduce Uganda’s dependence on imported refined fuel, stabilize fuel prices, and enhance national energy security. Uganda’s imports of refined petroleum products have risen sharply, from approximately USD 976 million in 2020 to over USD 2 billion in 2023, reflecting the country’s increasing reliance on foreign petroleum to meet its energy needs.