Uganda and Alpha MBM Sign Deal to Build Oil Refinery in Hoima

Uganda has taken a big step in its oil industry by signing a new agreement to build an oil refinery in Hoima District. The deal was signed at State House Entebbe in front of President Yoweri Museveni, Energy Minister Ruth Nankabirwa, and His Highness Sheikh Mohammed Bin Maktoum of the UAE.

President Museveni thanked Sheikh Maktoum and his team from the United Arab Emirates (UAE) for their interest in investing in Uganda. He said this oil refinery project is not just about fuel but also about helping Uganda stop exporting raw materials and start producing finished oil products like petrol, diesel, jet fuel, kerosene, and heavy oils.

The agreement was made between Uganda’s Ministry of Energy and Mineral Development, the Uganda National Oil Company (UNOC), and a joint venture partner called Alpha MBM from the UAE. Together, they will plan, build, and run the oil refinery, which will have a processing capacity of 60,000 barrels of crude oil each day.

The Hoima Oil Refinery is expected to be completed in three years. It will help Uganda reduce its fuel imports and become a key center for oil refining and distribution in East Africa. The project is part of Uganda’s wider plan to benefit more from its 6.5 billion barrels of oil reserves found in the Albertine Graben region.

The company managing the refinery is the Uganda Refinery Holding Company (URHC), a branch of UNOC. This project has been in the pipeline for more than ten years but faced delays due to lack of funds and changes in investors. A previous agreement with the Albertine Graben Refinery Consortium, which had partners from the U.S. and Italy, failed after long discussions.

After a new search for investors, Alpha MBM was selected as the new partner through a careful review process. The signing of this agreement shows a fresh commitment to make the project a reality.

The refinery will help Uganda make its own fuel instead of importing it. This can lower fuel prices, improve energy security, and strengthen the economy. Uganda’s fuel imports have gone up a lot over the past few years. In 2020, Uganda imported fuel worth about $976 million. By 2022, this amount had grown to around $1.6 billion. In 2023, the country spent over $2 billion on refined petroleum, most of which came through Kenya from Gulf nations.

The refinery will come with extra infrastructure like a storage area, product pipeline, and new roads. To help with transport and oil business operations, the Hoima International Airport is also being built nearby.

Thousands of jobs will be created during the construction and operation stages. Local businesses will also benefit by supplying goods and services. The refinery will serve not only Uganda but also nearby countries such as Rwanda, South Sudan, eastern DRC, Kenya, and Tanzania. Some of these countries are also interested in buying shares in the refinery or buying fuel from it.

The government says the project will focus on protecting the environment and helping local communities. Most of the land needed has already been acquired, and community members are being included in the development process.

Now that the agreement is signed, the next steps include preparing technical designs, finding funds, and finalizing investment plans. The first fuel from the refinery is expected to be ready by 2028. This timing matches the start of oil production from Uganda’s major oil fields—Tilenga and Kingfisher—which are managed by TotalEnergies and CNOOC.

This new agreement gives Uganda fresh hope in its oil journey and marks the beginning of serious progress in the energy and industrial sectors.