Africa’s petroleum refining capacity is expanding at a faster rate as Uganda’s long-awaited 60,000-barrel-per-day oil refinery project, estimated at $4 billion, advances steadily, with operations expected to commence between the fourth quarter of 2029 and the first quarter of 2030.
Upon completion, the project will significantly expand Africa’s petroleum refining capacity and become the newest major refinery after the Sentuo Refinery (60,000 barrels per day) in Ghana and Africa’s largest petroleum refinery, the Dangote Petroleum Refinery in Nigeria.
The project aims to reduce the region’s reliance on imported fuel, strengthen domestic energy security, and position Uganda as a key player in Africa’s downstream oil sector.
Located in Kabaale, Hoima District, the refinery is being jointly developed by the Uganda National Oil Company (UNOC) and UAE-based Alpha MBM Investments under a 60,000-barrel-per-day capacity agreement signed in March 2025. UNOC will hold a 40% stake, while Alpha MBM will provide the remaining 60%.
Speaking at the Invest in Uganda panel discussion during the 2025 African Energy Week in Cape Town, South Africa, Mr. Michael Nkambo Mugerwa, General Manager of the Uganda Refinery Holding Company, said the $4 billion facility will anchor the country’s transition from a crude exporter to a refined-product hub — part of Africa’s broader drive to strengthen local refining capacity and reduce reliance on imported fuels.
“This project goes beyond fuel production. We are looking at petrochemicals, kerosene, fertilizers, and gas processing — the refinery is designed to capture the full value chain,” he said, as reported by Business Insider.
The refinery forms part of a broader industrial ecosystem being developed within the Hoima Industrial Park, supported by $3–4 billion in initial investments, with the potential to attract an additional $1–2 billion.
Last year, the Ugandan government agreed to fund the refinery entirely through equity — contributing 40%, while Alpha MBM Investments LLC provides the remaining 60%. The decision followed challenges in securing international debt financing, as European and American banks increasingly distance themselves from fossil fuel projects.
However, Mugerwa noted that 15 investors have already committed to the project, alongside significant infrastructure works, including new roads, water systems, and a 200 MW high-voltage power supply.
The complex will not only serve Uganda’s domestic market but will also supply Tanzania and the Democratic Republic of Congo, creating a cross-border trade corridor for refined fuels and petrochemicals.
Ugandan leaders view the project as more than an energy milestone. Irene Bateebe, Permanent Secretary at the Ministry of Energy and Mineral Development, said the government is expanding its national energy portfolio to 10,000 MW, including hydro, solar, and nuclear sources.
“We have committed $5 billion for power infrastructure. This is about building a sustainable energy base for the future,” she said.
Uganda’s refinery joins a growing list of new African projects aimed at ending the continent’s dependence on imported fuels.
Nigeria’s $20 billion Dangote Refinery, which became operational earlier in 2025, has already reduced Nigeria’s fuel imports by more than half while exporting refined products to the U.S., Europe, and across West Africa.
The success of Dangote’s model — privately financed but nationally strategic — is now serving as a blueprint for emerging refinery projects in Uganda, Angola, and Senegal.
As global energy dynamics shift, Africa’s refining ambitions are no longer just about fuel security but also about economic sovereignty.
For Uganda, the upcoming refinery represents both a national milestone and a step toward a self-sufficient African energy landscape.
Source: https:// energynewsafrica.com
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