Africa has long been overshadowed by the more energy-independent nations of the world, with the vast majority of African nations relying on imports of refined products to meet increasing levels of demand for energy. However, recent market trends have exposed a new surge of African nations aiming to increase domestic production and develop energy frameworks that reshape the regional market. Uganda is set to redefine what the African energy sector is capable of with its new $4 billion refinery being backed by an iconic investor from one of the largest energy-producing nations in the world.
Uganda has signed a new agreement to accelerate the nation’s refining capacity
The Ugandan government has reported that it has signed a key agreement with UAE-based Alpha MBM Investments to develop the nation’s $4 billion refinery, transforming the Ugandan nation from a net importer of petroleum products to a self-sufficient energy nation that can handle vast amounts of crude. The project has been a long time coming for the East African nation, following several delays that pushed the timeline back.
Uganda’s government has lauded the agreement signed with the UAE-based investment company, and has noted that the project will not only enable the country to develop its own energy market that is not reliant on imports but will also provide employment for thousands in a nation that has been ravaged by poverty for generations.
The long-delayed refinery project is finally picking up some traction
The agreement is seen as a landmark achievement for the nation and positions Uganda to become a regional energy-producing hub over the coming years. The signing of the agreement has become a major step towards reaching a Final Investment Decision by next year, with both parties targeting an FID in July 2026. After which, construction on the new $4 billion refinery can commence.
Uganda’s new refinery will have the backing of the Dubai Royal Family
Crucially, the signing of the agreement saw His Highness Sheikh Mohammed bin Maktoum bin Juma Al Maktoum, a member of the Dubai Royal Family, leading proceedings. The UAE investment company will partner with the Uganda National Oil Company (UNOC) to develop the refinery. The refinery will be built in Kabaale, Hoima District, and once operational, will be one of East Africa’s largest energy investments to date.
The decision to finally move forward with the refinery project no doubt stems from Uganda’s ambitions to reduce imports of essential energy resources, which at the moment sit at around $2 billion every year. According to Uganda’s investment regulator, Alpha MBM will hold a 60% stake in the new refinery, while the Uganda National Oil Company (UNOC) will hold the remaining 40%.
“(This project will) create thousands of jobs, develop local expertise, and serve as a springboard for industries such as petrochemicals and fertiliser production. – Uganda’s Energy Minister Ruth Nankabirwa
Africa has seen several nations outlining their refinery expansion plans in recent months, such as Senegal, which revealed its plans to construct a second refinery, as well as the huge Dangote Refinery in Nigeria, exemplifying the substantial growth of the African domestic energy industry.
Africa is finally developing its energy industry to compete with the rest of the world
Uganda’s refinery plans, which are being backed by the UAE-based investors, are exemplary of the shifting energy market. The region is set to finally reach its potential and reduce reliance on imports to meet energy demand. Nigeria’s Dangote refinery has become the cornerstone of the region’s energy production sector, and add to that the substantial growth expected in countries such as Angola, which is preparing to kick off operations at the new Cabinda refinery by the end of the year, and the African energy market is set to bring in the new year in style.
