Uganda’s oil refinery is inching closer to development, after potential investors said they were nearing a final decision on the same.
According to a budget policy document, work on the infrastructure connected to the plant needs to start. In line with this, the Energy ministry is seeking government funding of $27 million (KSh2.7 billion) in 12 months up to June 2021 for the infrastructure development.
Once complete, the government will hold a 40% stake in the project, while Albertine Graben Refinery Consortium (AGRC), the company contracted to build the refinery, will hold the other 60%.
However, the government has an option of selling some of its stake to other East African nations and institutional investors. Already, Kenya and Tanzania have committed to take a 2.5% and 8% stake, respectively.
Bloomberg reports that although the oil refinery has a full capacity of processing 60,000 barrels per day, it will only operate at about half of that capacity during its initial days of operation.
The cost of building the refinery stands at $3.5 billion (KSh353 billion). It will also process crude oil from fields jointly owned by Total SA, Tullow Oil and China’s CNOOC.
The East African reports that in November last year, the Africa Finance Corporation(AFC) committed $20 million towards the refinery construction. Other financiers include the African Development Bank, Prosper Africa, and Trace Development Agency.