Ministry of Energy Clarifies Uganda Refinery Project Status – The Ankole Times

Ministry of Energy Clarifies Uganda Refinery Project Status

Saturday, March 30, 2024
PHOTO -- Ministry of Energy and Mineral Development
Jim Sykes Ocaya
3 Min Read

The Ministry of Energy and Mineral Development wants to clear up confusion about the Uganda Refinery Project following an article in the New Vision Newspaper on March 28th, 2024. The article claimed President Museveni ordered the renewal of the refinery contract.

According to the article, the Albertine Graben Energy Consortium (AGEC) was making good progress and meeting all the requirements outlined in the Project Framework Agreement (PFA) to reach the Final Investment Decision (FID).

However, it’s important to note that AGEC didn’t meet some critical milestones within the set deadlines. This caused the agreement to expire on June 30th, 2023.

- Advertisement -

AGEC was encouraged to talk to a new group of investors about joining the project under a new agreement.

Contrary to what the article said, AGEC didn’t fulfill essential requirements. These include getting commitment letters from lenders covering at least 100% of the needed debt before FID, signed commitment letters from equity investors, completing the Environmental and Social Impact Assessment (ESIA), submitting a fixed price for the project, doing a Commercial Viability Assessment (CVA), and hiring a financial advisor, among other things.

Because of these shortcomings, the FID couldn’t be reached as planned in the PFA.

Additionally, claims about the government not providing land for the refinery infrastructure are not true.

The government gave AGEC access to project sites as agreed upon in the contract. Land leases were supposed to be given after the FID, following the terms of the PFA.

After the PFA expired, the Ugandan government started talking to potential investors to move the refinery project forward.

- Advertisement -

Alpha MBM Investments LLC was chosen as a promising partner after careful consideration, and a memorandum of understanding has been signed with them.

Work is now happening to implement this agreement, showing progress in developing the refinery.

It’s important to stress that the refinery project is crucial for Uganda because of its significant economic benefits. These include securing the country’s fuel supply, reducing how much fuel needs to be imported, creating jobs, and helping people gain skills.

- Advertisement -

The Memorandum of Understanding and relevant laws guarantee that the refinery has the first right to Uganda’s crude oil.

It’s important to understand that there’s no current process to renew the expired PFA with AGEC.

The government is committed to moving the refinery project forward with Alpha MBM Investments LLC. This shows its dedication to making this important national project a reality.

For accurate information about the Uganda Refinery Project, people can contact the Ministry of Energy and Mineral Development.

Share This Article
The Ankole Times
We come to you. Want to send us a story or have an opinion to share? Send an email to [email protected]
I've got feedback!
Jim Sykes Ocaya is the Business Editor at The Ankole Times, where he spearheads comprehensive coverage of the business landscape in Uganda. With a keen eye for market trends, financial analyses, and corporate developments, Jim ensures that The Ankole Times delivers top-notch business news to its readers. His insightful reporting provides valuable insights into the economic pulse of the region, making him a trusted source for the business community.
Leave a comment

Leave a Reply

Your email address will not be published. Required fields are marked *