The Alpha MBM Investments LLC of the United Arab Emirates, under the leadership of Sheikh Mohammed bin Maktoum bin Juma al Maktoum of the Dubai Royal Family, has been selected by the Ministry of Energy in Uganda to finance and build a 60,000 barrels per day (bpd) oil refinery that is planned for Buseruka Sub-county, Hoima District. After assessing five interested firms, the $4 billion Greenfield project negotiations with the chosen firm started on January 16. The government is working to finalize negotiations in order to come to significant business agreements with Alpha MBM Investments LLC.
The announcement follows the Project Framework Agreement (PFA) for the refinery’s design, financing, and construction expiring with the Albertine Graben Energy Consortium (AGEC), a special purpose company including American and Italian corporations. A new investor has to be chosen because the PFA, which was signed on April 10, 2018, was renewed twice before it expired on June 30.
According to the description, Uganda is seen by Alpha MBM Investments LLC as a “untapped market with the potential to create opportunities where none were perceived.” Important business deals are presently being negotiated by the Ministry of Energy and the new investor. It is yet unknown what will happen to the technical research and designs that AGEC completed.
Initially, President Museveni declared his goal to establish a local refinery with a 6,000 bpd output capacity, which was then increased to 10,000 bpd. But oil experts have questioned the refinery’s viability, and a new research from the Climate Policy Initiative (CPI) raises the possibility that Uganda’s oil refinery won’t be profitable in the long run.
