The Ministry of Energy in Uganda has chosen the United Arab Emirates’ Alpha MBM Investments LLC, led by Sheikh Mohammed bin Maktoum bin Juma al Maktoum of the Dubai Royal Family, to finance and construct a proposed 60,000 barrels per day (bpd) oil refinery in Buseruka Sub-county, Hoima District. The $4 billion Greenfield project negotiations with the selected firm commenced on January 16, following the evaluation of five firms expressing interest. Final negotiations are in progress, and the government aims to reach key commercial agreements with Alpha MBM Investments LLC.
The announcement comes after the expiry of the Project Framework Agreement (PFA) with the Albertine Graben Energy Consortium (AGEC), a special purpose vehicle involving American and Italian firms, for the design, finance, and construction of the refinery. The PFA, signed on April 10, 2018, and extended twice, expired on June 30, prompting the selection of a new investor.
Alpha MBM Investments LLC is described as viewing Uganda as an “untapped market with the power to create opportunities where none were perceived.” The Ministry of Energy is currently negotiating key commercial agreements with the new investor. The fate of the activities undertaken by AGEC, including technical studies and designs, remains unclear.
President Museveni had initially announced the intention to have a local refinery with a production capacity of 6,000 bpd, later scaled up to 10,000 bpd. However, the viability of the refinery has been questioned by oil experts, and a recent report by the Climate Policy Initiative (CPI) suggests that Uganda’s oil refinery could be unviable in the long run.
