Uganda is set to borrow $118 million (KSh 11.8 billion) from China’s Industrial and Commercial Bank to help in the construction of three roads. The roads are key to the oil production project expected to start soon in Uganda.
According to the government, the roads will enable the efficient exploration and production of the country’s oil resources.
In January this year, a budget policy document for the country’s oil refinery showed that work on the infrastructure connected to the plant needs to start. The Energy ministry is seeking government funding of $27 million (KSh2.7 billion) for the infrastructure development.
Commercial production of Ugandan crude oil has been delayed partly because of lack of infrastructure, such as an export pipeline. The oil reserves were discovered about thirteen years ago, with delays caused by failed tax negotiations.
Uganda’s oil reserves, which are estimated at 6 billion barrels, are co-owned by Total, China’s CNOOC and Tullow Oil.