Uganda Secures $4 Billion UAE Partnership for National Oil Refinery
Uganda’s long-awaited national oil refinery has reached a critical milestone with the government finalizing a $4 billion partnership with UAE-backed investor Alpha MBM Investments LLC, a development that could transform fuel supply dynamics across East Africa. After more than a decade of delays, the project is progressing toward a Final Investment Decision expected by July 2026, following the signing of key agreements between the Uganda National Oil Company (UNOC) and the Dubai-based firm.
The refinery, located in the Albertine Graben, is designed to process up to 60,000 barrels of crude oil per day once completed. The project comes at a pivotal time for Uganda, which currently spends an estimated $2 billion annually importing petroleum products, a significant drain on foreign exchange reserves and a driver of domestic inflation. Officials view the refinery as central to reversing this trend by enabling Uganda to refine its own crude rather than exporting it in raw form.
President Yoweri Museveni, who presided over the signing ceremony at State House in Entebbe, emphasized that the refinery is part of a broader effort to move Uganda up the value chain. He described it as a step toward ending the cycle of exporting raw materials and importing finished products, a pattern that has long limited industrial growth across Africa. Under the new ownership structure, Alpha MBM Investments will hold a 60 percent stake in the project, while UNOC will retain 40 percent, according to the Uganda Investment Authority. The deal follows years of unsuccessful negotiations with previous partners and is seen as evidence of renewed investor confidence in Uganda’s oil sector.
Beyond domestic supply, the refinery is expected to serve regional markets, including South Sudan, eastern Democratic Republic of Congo, Rwanda, and Burundi, many of which currently rely on imports through Kenya and Tanzania. If realized, the project could reduce transport costs and improve fuel supply reliability for landlocked countries in East Africa. Global energy market volatility, driven by geopolitical tensions, supply disruptions, and rising demand in developing economies, underscores the strategic importance of local refining capacity.
Uganda’s refinery aligns with continental trends to strengthen energy security and retain greater value from natural resources. Officials have also highlighted potential economic spillovers. Energy Minister Ruth Nankabirwa said the refinery would create thousands of direct and indirect jobs and foster domestic expertise in refining, petrochemicals, and related services. The project could also support downstream industries, including fertilizer and petrochemical production, and provide opportunities for local firms to integrate into supply chains. Analysts note that related investments, such as storage facilities, pipelines, and industrial parks, could help expand Uganda’s modest manufacturing base.
For Alpha MBM Investments, the deal reflects growing Gulf interest in African energy infrastructure and provides a platform for detailed engineering, financing, and regulatory work ahead of the FID. While large refineries typically require several years to complete after FID, early groundwork in Uganda could help accelerate the timeline. Challenges remain, including financing complexities, infrastructure coordination, and evolving global energy policies. With agreements signed and a clear timetable in place, 2026 is shaping up as a pivotal year for Uganda’s oil ambitions. If delivered as planned, the refinery could reshape the country’s energy economics, strengthen regional fuel security, and establish Uganda as a key refining hub in East Africa.
Source: angolanminingoilandgas.com
