Uganda’s long-delayed national oil refinery has entered its most critical stage, with the government closing in on a $4 billion partnership with a United Arab Emirates–backed investor that could transform fuel supply across East Africa.
After more than ten years of setbacks, the project is now moving toward a Final Investment Decision expected by July 2026, following the signing of key agreements between the Uganda National Oil Company (UNOC) and Alpha MBM Investments LLC, a Dubai-based firm.
The refinery will be located in the Albertine Graben and is planned to process up to 60,000 barrels of crude oil per day once operational, seen on Business Insider Africa.
For Uganda, the renewed progress comes at a sensitive moment. The country currently spends an estimated $2 billion annually importing petroleum products, putting pressure on foreign exchange reserves and contributing to inflation.
Authorities view the refinery as a cornerstone of efforts to reverse this trend by refining domestically produced crude instead of exporting it in raw form.
President Yoweri Museveni, who oversaw the signing ceremony at State House in Entebbe, described the project as part of a wider strategy to move Uganda up the value chain.
He said the refinery was about ending the cycle of exporting raw materials and importing finished products, a pattern that has long constrained industrial growth across much of Africa.
Under the agreed ownership structure, Alpha MBM Investments will take a 60 percent equity stake, while UNOC will retain 40 percent, according to the Uganda Investment Authority.
The deal follows years of failed negotiations with earlier partners and is being presented by the government as a sign of renewed investor confidence in Uganda’s oil sector.
Beyond its domestic impact, the refinery is expected to serve a broader regional function.
Uganda plans to supply refined petroleum products to neighbouring countries such as South Sudan, eastern Democratic Republic of Congo, Rwanda, and Burundi, which currently rely heavily on fuel imports transported through ports in Kenya and Tanzania.
If successful, the refinery could lower transport costs and improve supply reliability for these largely landlocked markets.
The timing is notable, as global energy markets remain volatile due to geopolitical tensions, supply disruptions, and rising demand in developing economies.
In response, many African governments are placing greater emphasis on local refining capacity to strengthen energy security and retain more value from natural resources.
Don’t Miss This:
In Uganda, Museveni Wins Seventh Term Amid A Familiar Dispute Over Election Fairness
Uganda’s refinery plans align with this wider continental shift and are expected to complement the country’s upstream oil developments and its planned export pipeline, further embedding Uganda within regional energy trade networks.
Government officials have also pointed to broader economic benefits. Energy Minister Ruth Nankabirwa said the project would generate thousands of direct and indirect jobs and help build local expertise in refining, petrochemicals, and related services.
She added that the refinery could act as a foundation for related industries, including fertiliser and petrochemical production, while opening opportunities for local firms to participate in supply chains.
Analysts suggest that downstream investments associated with the refinery, such as storage facilities, pipelines, and industrial parks, could significantly deepen Uganda’s manufacturing base, which remains relatively small given the country’s population size and growth ambitions.
For Alpha MBM Investments, the agreement highlights growing Gulf interest in African energy infrastructure, particularly state-backed projects supported by long-term demand prospects.
The partnership allows Uganda to move ahead with detailed engineering designs, financing arrangements, and regulatory approvals ahead of the planned investment decision.
Although large refinery projects typically take several years to complete after a Final Investment Decision, Ugandan officials say early preparatory work could help shorten timelines.
Challenges remain, including complex financing requirements, coordination of supporting infrastructure, and evolving global attitudes toward fossil fuels.
Even so, with contracts signed and a clear timetable outlined, 2026 is emerging as a decisive year for Uganda’s oil ambitions.
If completed as planned, the refinery could reshape the country’s energy economics and strengthen its push to become a regional refining hub, with effects likely to be felt well beyond Uganda’s borders.
Don’t Miss This:
Energy Consortium Secures $50 Billion To Build Africa’s Second-Largest Refinery In Nigeria
Image Credit: Kharis Petroleum Resources & Investments
