Uganda’s oil refinery set for completion in 2030

Uganda’s long-awaited oil refinery in the Albertine region is now expected to be completed between late 2029 and 2030, according to the Uganda National Oil Company (UNOC), meaning the country will begin producing crude oil several years before it can refine it locally.

While the delay pushes back immediate domestic benefits, government officials and industry players insist the refinery remains a cornerstone of Uganda’s long-term energy and industrial strategy—one that promises energy independence, economic growth, and the birth of a domestic petrochemical industry.

Tony Otoa, UNOC’s Chief Corporate Affairs Officer, confirmed that the refinery will come on stream well after crude oil production begins.

“It definitely has to happen in 2030 because it takes about three to four years to come together, based on all the planning and preparations currently in place,” Otoa said in an interview.

Commercial crude oil production—commonly referred to as first oil—is expected in the second or third quarter of 2026. In the absence of a functioning refinery, all crude from the Tilenga and Kingfisher fields will be transported via the East African Crude Oil Pipeline (EACOP) for export through Tanzania’s Port of Tanga.

Although exports will provide early foreign exchange earnings, Uganda will initially forgo the added value that comes with refining crude into finished petroleum products for domestic use. Key benefits such as job creation, skills development, energy security, and lower fuel import bills will only materialize once the refinery becomes operational.

Originally, Uganda planned to retain part of its crude production to supply a greenfield refinery in Hoima. However, progress stalled after the American-led consortium tasked with financing the project failed to secure funding.

The $4-billion refinery project faced another setback in June 2023 when the Project Framework Agreement between the government and the Albertine Graben Energy Consortium (AGEC) expired. Negotiations had first begun in April 2018 under the Albertine Graben Refinery Consortium (AGRC), later rebranded as AGEC.

Momentum was restored in early 2024 after the government signed a memorandum of understanding with Alpha MBM Investments LLC of the United Arab Emirates. Formal negotiations on key commercial agreements began on January 16, 2024.

Under the proposed arrangement, Alpha MBM Investments—led by Sheikh Mohammed bin Maktoum bin Juma Al Maktoum—will hold a 60 percent stake in the refinery, while Uganda, through UNOC, will retain 40 percent. The government has already mobilized resources to finance UNOC’s share.

Petroleum Authority of Uganda Executive Director Ernest Rubondo recently told journalists that negotiations with the investor were ongoing, though he declined to give timelines for a final investment decision. He acknowledged that the refinery will not be ready when crude production begins.

Otoa, however, expressed optimism, saying the investor is expected to reach a final investment decision before the end of 2025. He noted that early works at the site are already underway, signaling progress.

“Like any major project, negotiations are continuous,” Otoa said. “The early works are a manifestation that the project is in shape and moving toward 2030.”

President Yoweri Museveni has repeatedly insisted that Uganda must have a refinery as part of its oil and gas development, arguing that exporting raw materials while importing finished products perpetuates economic dependency.

By pushing ahead with the refinery, Uganda hopes to position itself as a major energy player in Africa and rewrite a familiar continental narrative. The refinery is central to a broader vision of self-sufficiency, industrialization, and economic sovereignty.

At the heart of this vision is the Kabalega Industrial Park in Hoima—a 29-square-kilometer industrial hub that will host petrochemical industries, logistics centers, energy infrastructure, warehousing facilities, and an international airport. The refinery is designed to process 60,000 barrels of crude oil per day and produce not only fuel, but also petrochemicals, fertilizers, kerosene, and processed natural gas.

A January 2024 study by the Natural Resources Governance Institute, authored by Paul Bago and Tom Scufield, found that the refinery could significantly strengthen Uganda’s fuel security and balance of payments. Their economic modeling suggests the project could achieve an internal rate of return of 13 percent under baseline assumptions.

However, the study cautioned that Uganda’s 40 percent stake may cost more than anticipated. The government could need to divert about $330 million in present-value terms from the national budget in the 2030s to service loans, with costs rising if oil prices fall or construction overruns occur.

Despite the risks, analysts agree that the refinery could help reduce Uganda’s reliance on imported fuels, particularly as regional supply routes from Kenyan and Tanzanian ports have faced repeated disruptions.

For Uganda, the refinery is more than an energy project—it is a bet on long-term transformation. Though delayed, officials believe its eventual completion will anchor a new era of value addition, industrial growth, and energy independence.