Uganda is on the verge of a transformative leap in its economic journey following the signing of a $4 billion agreement to construct a state-of-the-art oil refinery in Kabaale, Hoima District. The deal, signed on March 29, 2025, at State House Entebbe, unites the Government of Uganda and UAE-based Alpha MBM Investments LLC, led by Sheikh Mohammed bin Maktoum bin Juma Al Maktoum. President Yoweri Museveni presided over the ceremony, calling the refinery a “game-changer” for Uganda’s economic future.
Under the agreement, Alpha MBM holds a 60% stake, while the Uganda National Oil Company Limited (UNOC) retains 40%. The refinery, with a capacity of 60,000 barrels per day, is poised to become East Africa’s first major crude processing plant. It will produce petrol, diesel, kerosene, and liquefied petroleum gas (LPG), reducing Uganda’s reliance on petroleum imports through Mombasa and Dar es Salaam.
A macroeconomic study by Stanbic Bank Uganda and UNOC, projects the refinery will inject $3.3 billion (Shs12.53 trillion) into Uganda’s GDP annually, contribute $8.2 billion (Shs29.9 trillion) to national capital formation, and generate over 32,000 jobs—1,200 direct, 16,900 indirect and 13,900 induced.
Energy Minister Hon. Ruth Nankabirwa hailed the refinery as a long-awaited leap toward energy independence. “It will be a catalyst for growth and development,” she said. “Beyond creating jobs, it will launch industries such as petrochemicals and fertilisers.”
The refinery is expected to produce 658 metric tonnes of LPG daily, reducing carbon emissions by cutting the number of fuel trucks on Uganda’s roads.
Tony Otoa, Chief Corporate Affairs Officer at UNOC, emphasized the broader regional impact of the refinery. “The facility is designed to serve both domestic and regional fuel demands, helping to stabilize fuel prices and enhance Uganda’s balance of payments by approximately $591 million (about Shs2.16 trillion) annually.”
Museveni urged government agencies and ministries to expedite administrative processes and avoid bureaucratic delays that could hinder progress on the project. He underscored the refinery’s potential to reshape Uganda’s economic trajectory and reduce exposure to foreign supply chains vulnerable to global shocks.
The refinery is central to Uganda’s broader oil and gas strategy, including the East African Crude Oil Pipeline and oil field development in the Albertine Graben. With first oil expected in 2025, the IMF projects Uganda’s GDP growth could surge to 10.8% in FY2025/26, nearly double earlier forecasts.
Construction is expected to begin later this year, with commissioning slated for 2027. Once operational, the refinery will enhance local enterprise participation, attract investment, and anchor Uganda’s path to energy self-sufficiency.