Uganda’s long-running ambition to establish its first crude oil refinery has entered a new phase, as announced by the sector regulator on August 5, 2029, confirming that a final investment decision is expected in February 2027. This announcement marks a significant step forward for the $4 billion project, which faced decades of delays and failed negotiations with multiple international partners.
The Petroleum Authority of Uganda (PAU) stated on social media platform X that basic engineering works have commenced for the facility, which is planned for Kabaale in Hoima District, western Uganda.
The investment decision will serve as the foundation for the full development of a project designed to process 60,000 barrels of oil per day, acting as a cornerstone for the growing hydrocarbons industry of the East African nation.
The project’s progress follows a memorandum of understanding signed in March 2025 with UAE-based Alpha MBM Investments LLC. Under the implementation agreement, Alpha MBM will hold a 60% stake in the refinery, while the remaining 40% will be held by the Uganda National Oil Company (UNOC), ensuring state participation.
The agreement was signed in the presence of President Yoweri Museveni, who emphasized that the refinery is central to Uganda’s economic transformation. “This refinery is not just about fuel; it is about Uganda producing and exporting refined products instead of importing,” he said.
Uganda discovered commercially viable oil reserves in the Albertine Graben region in 2006, with verified reserves estimated at 6.5 billion barrels, of which 1.4 billion are considered recoverable. However, the journey to development has been protracted. Initially, the government sought investment from Total of France, Tullow Oil of Britain, and the China National Offshore Oil Corporation (CNOOC).
CNOOC and its partners had previously been involved in negotiations to build the refinery, with early projections suggesting operations could begin as early as 2015. However, these plans faltered due to financing challenges and disagreements over the project’s structure. Over the years, similar initiatives with investors from Russia and South Korea also failed to materialize, leaving the refinery project in a state of uncertainty.
The appointment of Alpha MBM Investments in late 2023, replacing the Albertine Graben Energy Consortium, brought renewed momentum. The consortium’s previous project framework agreement had expired without extension, prompting Uganda to seek a more committed partner. The UAE firm, led by a member of Dubai’s royal family, finalized the implementation agreement in March 2025 after 15 months of negotiations.
President Museveni has been a vocal advocate for this approach, arguing that the country must cease exporting raw materials and instead develop domestic refining capacity. The facility is expected to save Uganda over $1.23 billion annually in foreign currency currently spent on importing refined petroleum products.
Beyond fuel production, the refinery will serve as the centerpiece of the Kabaale Industrial Park, a major industrial ecosystem that includes plans for petrochemicals, fertilizer production, and gas processing. The project also encompasses a 212-kilometer multi-product pipeline to transport refined products from Hoima to a storage terminal in Namwabula, Mpigi District. It is projected to create between 40,000 and 50,000 jobs during construction and operations, facilitating significant technology transfer and ancillary industrial development.
