Summary:
- $4.5 Billion Oil Refinery: U.S.-Led Consortium Fights Back as Uganda Chooses UAE Firm
In response to Uganda’s decision to partner with Alpha MBM Investments LLC, the Government stated that after careful consideration, Alpha MBM emerged as a promising partner for the refinery project, and a memorandum of understanding has been signed. Implementation of this agreement is in progress, indicating advancement in the refinery’s development.
Previously, talks between the Government and the Albertine Graben Energy Consortium (AGEC), comprising American and Italian firms, were terminated due to delays in securing funding for the project. Uganda then turned to Alpha MBM Investments LLC, led by His Highness Sheikh Mohammed bin Maktoum bin Juma Al Maktoum, from the UAE, to develop the refinery.
Despite AGEC’s claims and lobbying efforts to secure the deal, the Ministry of Energy stated that AGEC failed to meet critical milestones outlined in the Project Framework Agreement (PFA), resulting in the agreement’s expiration. Consequently, the Government proceeded with Alpha MBM Investments LLC.
The Energy Ministry clarified that AGEC did not fulfill essential requirements, including securing commitment letters from lenders, signed commitment letters from equity investors, completing the Environmental and Social Impact Assessment (ESIA), and providing a lump sum turnkey price for the project. As a result, the Final Investment Decision (FID) could not be reached as per the PFA.
Regarding land allocation, the Ministry affirmed that the Government fulfilled its obligations by granting AGEC access to project sites as stipulated in the agreement. Land leases were to be granted following the FID, as per the terms of the PFA.
Emphasizing the significance of the refinery project for Uganda’s economy, the Government reiterated its commitment to advancing the project with Alpha MBM Investments LLC. The project is expected to contribute significantly to the country’s GDP and create numerous job opportunities.
