Why Uganda’s oil refinery remains behind schedule

An artistic impression of an oil refinery. Uganda hopes to complete construction of a 60,000 barrels/day refinery by 2030. COURTESY IMAGE/PETROLEUM AUTHORITY OF UGANDA.

Delayed construction heightens importance of missing piece in fast-advancing oil dream

Kampala, Uganda | RONALD MUSOKE | When Uganda’s Petroleum Authority shared its latest update on the Lake Albert Development Project on Sept.30, the numbers told a story of motion and momentum. From the Tilenga oilfields in Buliisa to the Kingfisher wells on Lake Albert’s southern shores, and from the East African Crude Oil Pipeline (EACOP) cutting across the heart of the region to the nearly finished Kabalega International Airport, Uganda’s long-awaited oil dream appears tantalisingly close to reality.

Yet beneath the fanfare of progress, one project remains stubbornly behind the curve; the Uganda Oil Refinery. Conceived as the crown jewel that would process the country’s crude and guarantee energy self-sufficiency, the refinery has persistently lagged behind. Despite fresh assurances that the refinery will be ready between late 2029 and early 2030, it still faces years of preparatory work before a single barrel of oil is refined on Ugandan soil.

Officials frame this as a manageable sequencing issue rather than a contradiction. “Our plan is to expedite construction so that timelines do not overlap excessively,” said Lilian Nagawa, the Manager, Technology and Engineering at the Uganda Refinery Holding Company. “By 2028 we hope to have the refinery on board,” she told a group of senior Ugandan journalists on a recent study visit of the oil region.

The race ahead of the refinery

According to the Petroleum Authority of Uganda (PAU), work on the three-core midstream projects has accelerated markedly. At the US$ 5 billion Tilenga project, operated by a subsidiary of the French supermajor, TotalEnergies, 146 wells have been drilled across 10 well pads, while the Central Processing Facility—built to handle 190,000 barrels per day—is 57% complete as of Sept.30.

Further south at the smaller Kingfisher Development Area project, a subsidiary of the China National Offshore Oil Corporation (CNOOC) has already developed four oil fields, and here, overall progress stands at 70%. The EACOP pipeline, a 1,443-kilometre conduit linking Hoima in mid-western Uganda to the Tanzanian port of Tanga, has passed the 65% mark. Nearby, at the 29-square-kilometre Kabalega Industrial Park, the US$ 500 million Kabalega International Airport, designed to serve as a logistics hub for heavy oil-sector cargo, is 96% complete. Taken together, these milestones show that Uganda’s commercial oil production target of 2026 is within reach.

Drilling rigs continue humming along the Lake Albert basin while welders and electro-mechanical engineers seal sections of the EACOP, and engineers at Kabalega Airport are fitting the finishing touches to runways that will soon receive more equipment bound for the oilfields. But in contrast, the refinery that is supposed to anchor Uganda’s energy independence remains largely on paper.

A dream deferred

The latest official word on the project came in Cape Town during the African Energy Week 2025, where Michael Nkambo Mugerwa, the General Manager of the Uganda Refinery Holding Company, announced that construction would begin in late 2025, with operations commencing in the last three months of 2029 or the first three months of 2030.

The US$ 4 billion petroleum facility, to be located at Kabaale, Hoima District, will process 60,000 barrels of crude oil per day, and will be jointly financed by the Uganda National Oil Company (UNOC) and the UAE-based Alpha MBM Investments, holding 40% and 60% respectively, thanks to an agreement that was concluded in March this year.

“This project goes beyond fuel production,” Mugerwa said while speaking on the “Invest in Uganda” panel during this year’s African Energy Week 2025 which was held from Sept.29-Oct.3. “We are looking at petrochemicals, kerosene, fertilizers and gas processing. The refinery is designed to capture the full value chain.”

The industrial park surrounding the refinery, he added, already has 15 committed investors and could draw US$ 3–4 billion in immediate investment, with the potential to attract another US$ 1–2 billion. Supporting infrastructure—roads, water facilities, and a 200MW power connection—is underway.

UNOC officials emphasise local content—training Ugandan engineers and technicians to manage future refineries and pipelines. “Oil and gas are finite resources,” said Philips Obita, UNOC’s General Manager for Upstream during the panel discussion in Cape Town. “We are investing in local capacity so that Ugandans can explore, build, and operate these facilities themselves.” Such human-capital gains could outlast the oil boom, embedding technical skills across sectors from manufacturing to energy management.

Still, these promises cannot obscure a simple fact; that by the time the refinery begins operations, Uganda will have produced and exported crude for at least three years without an operational domestic refining plant.

The refinery’s logic

Officials and engineers at UNOC insist the refinery remains central to Uganda’s oil value chain. As Lilian Nagawa explained during the media visit, crude oil from Tilenga and Kingfisher is of little direct use to ordinary Ugandans until it is refined into “white products”—petrol, diesel, kerosene, and LPG.

“If you were given a barrel of (crude) oil today, it would be useless to you,” Nagawa told the journalists. “The refinery is what will transform that barrel into the petrol that powers your car or the LPG that fuels your stove.”

She outlined four segments of the project: The refinery plant itself, hosted at Kabaale; a water abstraction facility drawing from Lake Albert at Mbegu to supply industrial operations, the 220km multi-products pipeline that will transport refined fuel from Kabaale to Namwabula in Mpigi District as well as a storage terminal at the same location in Mpigi to distribute the products nationwide.

Designed to meet “Euro 5 emission standards,” with sulphur levels capped at 10 parts per million, the refinery will process Uganda’s “sweet but waxy” medium-heavy crude to yield around seven million litres of fuel daily, roughly matching current national demand. Once operational, officials say, Uganda will finally cut its dependence on imported fuel, saving precious foreign exchange and stabilizing pump prices.

Senior government officials during an “Invest in Uganda” panel discussion at the recent Africa Energy Week in Cape Town, South Africa. COURTESY PHOTO/AFRICA ENERGY CHAMBER.

Progress is mostly on paper

But, despite its strategic promise, the refinery’s physical progress remains modest. Nagawa noted that the Front-End Engineering Design (FEED) which is being conducted by the UK-based UOP Honeywell, is only about 50% complete. Land acquisition for the plant, water facility, and pipeline has been secured, and preliminary civil works to level the site will begin soon.

UNOC and Alpha MBM have signed an implementation agreement, and additional project contracts are under negotiation, Nagawa said. But the heavy construction phase—the EPC stage (Engineering, Procurement, and Construction)—will not begin until after the FEED is complete, likely sometime in 2026. That timeline leaves little margin if Uganda hopes to align the refinery’s completion with the 2026 first-oil target. Even under optimal conditions, building a refinery of this scale typically takes three to four years, excluding delays.

The financing puzzle

Shortly after the signing of the implementation agreement early this year, Energy Minister Ruth Nankabirwa hailed the Alpha MBM partnership as a breakthrough, arguing that Uganda’s 40% equity stake will ensure national ownership while avoiding the heavy foreign debt that dogged the EACOP’s financing. Under the deal, Uganda will fund its 40% share (about US$ 1.2–1.6 billion) through phased contributions managed by the Ministry of Finance, while Alpha MBM will cover the remaining 60%.

“This comprehensive agreement will fast-track the entire infrastructure,” Nankabirwa said. “We are not going to rely and negotiate with lenders abroad like we did with the EACOP.” She also listed expected benefits including; 32,000 direct and indirect jobs, US$ 3.4 billion annual GDP impact, US$ 8.3 billion annual capital formation, and US$ 591 million improvement in the balance of payments once Uganda stops importing refined fuel.

For a country whose current GDP is around US$ 50 billion, such numbers underscore the refinery’s potential significance. Yet skeptics caution that the sheer scale of the investment, coupled with past delays, makes timely delivery uncertain. 

Lessons from the other Projects

Comparisons are inevitable. The Tilenga and Kingfisher projects appear to have benefitted from experienced global operators—TotalEnergies and CNOOC—backed by established supply chains, technical expertise, and steady financing. The EACOP, though controversial for its environmental footprint, has already mobilised billions of dollars in debt and equity financing and secured engineering contracts.

By contrast, the refinery’s partnership with Alpha MBM, a relatively new entrant, still requires extensive due diligence and structuring. “Even with equity funding, such mega-projects rarely move without a strong syndicate of banks,” notes one regional energy analyst. “Until financial closure is achieved, progress will remain mostly administrative.” Uganda’s own 40% stake compounds the challenge. UNOC must source capital domestically or through government allocations—both constrained by fiscal pressures.

History of false starts

The Uganda refinery’s slow march is not new. First proposed in the mid-2000s as part of Uganda’s commercialization strategy, it has endured nearly two decades of delays, shifting partners, and repeated redesigns.

Earlier attempts to attract investors collapsed when the initial developers, Russia’s RT Global Resources and later the Albertine Graben Refinery Consortium, failed to reach financial close. The government then restructured the project and sought new partners, culminating in the 2025 agreement with Alpha MBM.

The opportunity cost

Several factors explain the refinery’s lag behind the other projects with the complexity of the design of the refinery perhaps topping the list. Unlike the oilwells or pipelines, a refinery requires bespoke engineering matched to the crude’s chemical composition. Uganda’s “sweet, waxy” crude demands specialised heating and distillation configurations. But refineries are also said to be capital intensive. At US$ 4 billion, the refinery is one of the most expensive infrastructure projects in Uganda’s history. Securing equity financing without multilateral loans or guarantees inevitably takes longer.

Global shifts toward renewable energy and electric mobility have made investors wary of long-term petroleum infrastructure. As Irene Bateebe, the Permanent Secretary at the Ministry of Energy, acknowledged in an NTV Uganda interview in April this year, “We are aware of the movement to electric mobility… our petroleum industry must remain relevant for the future.”

“The refinery is designed to be future-proof,” Bateebe said. “It integrates with the petrochemical industry—producing diesel, petrol, heavy fuel oil, jet fuel, and raw materials for plastics and fertilizers.”

She emphasised that Uganda’s approach (equity rather than debt financing) will yield greater control and faster returns once operational. “We price-based on import parity, so while prices may not halve, they will stabilize. The volatility Ugandans see at the pump will reduce.”

The refinery’s integration with the petrochemical industry could also cushion Uganda from the global energy transition, ensuring that oil remains valuable beyond transport fuels. Yet, without an operational refinery, the country will initially export crude while continuing to import all its refined fuel, a paradox President Yoweri Museveni never wanted to hear about.

Industry observers worry this could undercut the economic case for local refining. Even if senior government officials have maintained that the country’s oil refinery, once it is in operation has “First Call” for the crude oil, experts that The Independent has talked to in the recent past say, once the export infrastructure is operational, it’s difficult to divert crude back to domestic processing later because, “producers prefer the certainty of export contracts.”

A section of the Kingfisher Development Area Project’s Central Processing Facility (CPF) near the southern shores of Lake Albert in Kikuube District. COURTESY PHOTO/TADDEO SENYONYI.

Regional and geopolitical stakes

Uganda’s refinery is not merely a domestic venture. Its success or failure will reverberate across East Africa. Once operational, it could supply fuel to neighboring Tanzania, Kenya, South Sudan, and the DR Congo, reducing the region’s dependence on imports from the Gulf.

For Kampala, that would translate into geopolitical leverage and steady export revenue. But for regional partners, it may also create competitive tensions. Kenya’s aging Mombasa refinery, mothballed for years, could face a formidable rival. In this context, Uganda’s measured approach of prioritizing financing stability and environmental compliance reflects both caution and ambition.

Environmental considerations

Critics, however, warn that the refinery risks locking Uganda into a fossil-fuel trajectory just as the world pivots to renewables. Environmental activists have long argued that the EACOP already raises serious concerns over emissions and biodiversity losses; adding a refinery could exacerbate the country’s carbon footprint.

Government officials counter that Uganda’s Euro-5 design standard and investment in cleaner technologies will mitigate emissions. “We are designing this refinery to meet international standards,” Nagawa said. “It aligns with our energy-transition agenda.” The Ministry of Energy also points to planned investments in hydro, solar, and nuclear power-projected to expand Uganda’s total energy portfolio to 10,000 MW as evidence of a balanced strategy.

The balancing act

The government now faces a delicate balancing act—maintaining investor confidence in the upstream projects while demonstrating progress on the refinery. The stakes are high.

Should refinery delays persist, the economic multiplier effects—job creation, import substitution, value addition—may not materialise when the first oil flows. On the other hand, rushing the project could expose Uganda to cost overruns or technical flaws that have plagued poorly planned refineries elsewhere in Africa.

 The long road to self-reliance

For a generation of Ugandans, the refinery symbolises something larger than industrial infrastructure. It embodies the promise of economic independence; a future where the country not only exports crude but transforms it into products of value.

When Uganda struck oil in 2006, optimism was boundless. Nearly twenty years later, that optimism has been tempered by the realities of technical complexity, financing, and global energy politics.

The refinery’s repeated delays underscore how nation-building through hydrocarbons is neither quick nor straightforward. Yet they also reveal a government unwilling to abandon its vision of self-reliance.

As Irene Bateebe, the energy ministry’s permanent secretary, put it, “This refinery will strengthen our security of supply. It ensures Uganda remains relevant even as the world transitions. We are not just building for today but for tomorrow.”

Can refinery catch up?

In many ways, the refinery’s lag is emblematic of Uganda’s broader oil journey; ambitious, deliberate, but burdened by the heavy machinery of bureaucracy, financing, and shifting global tides. It is the one piece of the Lake Albert Development puzzle still struggling to find its rhythm, even as the rest of the ensemble nears its crescendo.

Uganda’s oil story has always been a story of patience. The government’s cautious, state-led approach has shielded the country from the reckless extraction that has marred other resource-rich nations across sub-Saharan Africa. Yet that same caution has meant that projects like the refinery–arguably the most vital for long-term value addition–remain perpetually “in the making.”

The delay does not nullify its importance. In fact, it heightens it. Without a functioning refinery, Uganda’s much-celebrated “first oil” will mark only half a victory; a logistical achievement, not yet a transformation. The true measure of success will come when that crude oil is turned into fuel for Ugandan cars, jet engines, and stoves; when the foreign exchange saved from reduced imports strengthens the shilling; when the industrial park around Kabaale teems with secondary industries and skilled Ugandans at work.

Until then, the refinery remains both Uganda’s most promising project and its most persistent challenge-a reminder that in the grand pursuit of oil-fueled prosperity, infrastructure alone does not make a petroleum economy. What will matter in the end is execution, discipline, and the political will to turn vision into steel and flame.

For now, Uganda’s oil dream is alive, but incomplete. And the refinery, long the missing piece in that dream, must finally rise to match the speed of the projects that surround it—if Uganda’s promise of self-sufficiency is to become more than a hope written into timelines