By Business Insider Reporter
Uganda’s long-delayed national oil refinery project has entered a decisive new phase, with the government finalising key agreements with a United Arab Emirates–backed investor in a move that could reshape the energy landscape of East Africa.
The US$4 billion refinery, which has faced repeated setbacks over more than a decade, is now advancing toward a Final Investment Decision (FID) later this year following the signing of a strategic partnership between the Uganda National Oil Company (UNOC) and Alpha MBM Investments LLC, a Dubai-based investment firm. Ugandan authorities are targeting July 2026 for the FID, a milestone that would unlock full-scale construction.
For Uganda – and the wider region – the development marks a significant step toward reducing dependence on imported petroleum products, strengthening energy security, and positioning the country as a regional refining hub.
A strategic project revived
Uganda currently spends an estimated US$2 billion annually on imported fuel, a heavy burden on its balance of payments and a persistent source of inflationary pressure. The refinery, planned for the oil-rich Albertine Graben region, has long been viewed as a solution to this challenge, enabling the country to process its own crude oil rather than exporting it in raw form.
After years of stalled negotiations with previous partners, the entry of Alpha MBM Investments has injected fresh momentum into the project. Under the new structure, Alpha MBM will take a 60 percent equity stake, while UNOC will retain the remaining 40 percent, according to the Ugandan Investment Authority.
The signing ceremony, held at State House in Entebbe, underscored the political weight attached to the project. President Yoweri Kaguta Museveni presided over the event, joined by Minister of Energy and Mineral Development Ruth Nankabirwa, UNOC Chief Executive Proscovia Nabbanja, and Alpha MBM Chairman Sheikh Mohammed bin Maktoum Al Juma Maktoum.
“This oil refinery is not just about fuel,” President Museveni said at the ceremony. “It is about Uganda producing and exporting refined products instead of importing. We must stop exporting raw materials and instead add value to everything we produce.”
East Africa’s energy ambitions
The refinery is designed to process up to 60,000 barrels of crude oil per day, making it one of the largest refining facilities in East Africa once completed.
Beyond meeting domestic demand, Uganda aims to supply refined petroleum products to neighbouring countries, including South Sudan, eastern Democratic Republic of Congo, Rwanda, and Burundi – markets that currently rely heavily on imports routed through coastal ports in Kenya and Tanzania.
In an increasingly volatile global energy environment – shaped by geopolitical tensions in Europe, supply disruptions elsewhere, and rising demand across Africa – regional refining capacity has become a strategic priority.
Governments across the continent are seeking to localise more of the energy value chain, from extraction to processing and distribution.
Uganda’s refinery ambitions align with this broader continental push. If delivered on schedule, the project would complement Uganda’s upstream oil developments and planned export pipeline, anchoring the country more firmly in regional energy trade.
Economic and industrial spillovers
Beyond fuel security, policymakers are positioning the refinery as a catalyst for wider industrial development. Energy Minister Ruth Nankabirwa said the project would create thousands of direct and indirect jobs, while also building local technical expertise in refining, petrochemicals, and related services.
“The project will serve as a springboard for industries such as petrochemical and fertiliser production,” Nankabirwa said. “It will also attract Ugandan businesses to participate in the supply of goods and services, boosting local enterprise development.”
Analysts note that downstream investments – such as storage facilities, pipelines, and industrial parks linked to the refinery – could significantly deepen Uganda’s manufacturing base, which remains relatively small compared with the country’s population and growth ambitions.
Investor confidence and regional signal
For Alpha MBM Investments, the deal signals growing Gulf interest in African energy infrastructure, particularly projects that combine long-term demand growth with government backing. The partnership framework allows Uganda to proceed with detailed engineering, financing arrangements, and regulatory approvals ahead of the planned FID.
The government has also moved to reassure investors by streamlining approval processes and reaffirming its commitment to a stable investment environment.
Large-scale refineries typically take several years to reach completion after FID, but Ugandan officials say early groundwork will help shorten timelines.
Regionally, the project sends a strong signal at a time when East African countries are recalibrating their energy strategies. Kenya, Tanzania, and Uganda are all exploring ways to balance fossil fuel development with the global energy transition, even as demand for refined products continues to rise.
A pivotal year ahead
With contracts now signed and timelines set, 2026 is shaping up to be a pivotal year for Uganda’s oil ambitions. While challenges remain – ranging from financing complexities to infrastructure coordination – the refinery’s renewed momentum marks the clearest progress yet on a project long seen as transformational. If successfully delivered, Uganda’s national refinery could not only reshape the country’s energy economics but also alter fuel supply dynamics across East Africa, reinforcing Kampala’s ambition to emerge as a key regional energy hub in the decade ahead.
