The Petroleum Authority of Uganda has announced that the Ugandan Government has selected United Arab Emirates-based Alpha MBM Investments as preferred bidder for a planned $4bn domestic oil refinery in Hoima.

The Hoima refinery will be equipped to process 60,000bopd.

It is expected to significantly enhance Uganda’s energy independence by reducing the need for fuel trans-shipment from neighbouring countries.

According to the regulator, final negotiations for the refinery’s financing and construction commenced this month after the selection of Alpha MBM Investments.

In addition to reducing costs pertaining to petrol, diesel and other fuels, the proposed oil refinery is expected to play a pivotal role in Uganda’s energy transition plan.

The refinery will produce liquefied petroleum gas, which is said to be a crucial component of the country’s clean cooking initiative.

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Uganda Minister of Energy and Mineral Development Ruth Nankabirwa said: “The Ministry of Energy and Mineral Development engaged stakeholders to develop a strategy for the refinery project and received expressions of interest from potential investors including Alpha MBM Investments LLC, Africa Economic Aid Limited, Bakertilly Middle East Limited, and St. Ignatius Energy.

“After thorough consultations and evaluations by the government, a memorandum of understanding was signed on 22 December 2023 between the Government of Uganda and Alpha MBM Investments LLC from the United Arab Emirates, outlining cooperation and negotiation terms for the refinery project.”

Furthermore, the ministry has granted a five-year licence to CNOOC (U) for the construction of the Kingfisher Development Area Natural Gas conversion facility in Kikuube District.