Uganda has finalised an agreement with UAE-based Alpha MBM Investments LLC to develop a 60,000-barrel-per-day (bpd) crude oil refinery in Kabaale, Hoima District, Monitor reported.

“The oil refinery is not just about fuel but also about Uganda producing and exporting refined products instead of importing them,” Ugandan President Yoweri Musewni said. “We must stop exporting raw materials and instead add value to everything we produce.”

State-owned Uganda National Oil Corporation (UNOC) concluded a partnership agreement with the private investment firm in March. The requisite commercial agreements were signed on August 16. 

The Ugandan government entered into negotiations with Alpha MBM Investments after the Albertine Graben Energy Consortium (AGEC) backed out.

Alpha MBM, led by Sheikh Mohammed bin Maktoum of the Dubai royal family, will hold a 60% stake, and the Uganda National Oil Company (UNOC) will hold the remaining 40%.

The $4bn facility will be financed through a combination of debt (60%) and equity (40%), according to earlier reports. Construction is expected to begin this year and the refinery could be operational within three years.

The Greenfield Oil Refinery at Kabaale project includes a 211-kilometre multi-product pipeline from the city, Uganda's second largest, to a storage and distribution terminal in Namwabula, Mpigi District, and a raw water pipeline from Lake Albert to the refinery.

The refinery forms part of Uganda’s strategy to boost energy security and reduce reliance on fuel imports. According to UNOC, the country consumes about 6.0–6.5mn litres of refined fuel daily, with around 90% imported. In 2023, petroleum imports cost approximately $2.02bn.

A 60,000-bpd refinery could produce about 9.54mn litres per day, meeting local demand and creating surplus for export to regional markets in Africa, a net importer of petroleum products despite exporting crude.

As bne IntelliNews reported, Uganda also recently entered into the final 12-month phase of the East African Crude Oil Pipeline (EACOP), with engineers expecting completion by mid-2026. The 1,443-kilometre pipeline will transport crude from the Albertine Graben to Tanzania’s Tanga port for export, with work advancing on a key 75-kilometre stretch linking the Waiga River to the Kabalega Industrial Park in Hoima.