Uganda's Bold Oil Bet: $2 Billion Loan Boosts National Infrastructure Dreams

Uganda National Oil Company plans to borrow $2 billion from Vitol to finance infrastructure projects, including a crude oil refinery. The plan, backed by the finance ministry, involves cooperation with Alpha MBM Investments for a $4 billion refinery, with Uganda beginning commercial oil production next year.

The Uganda National Oil Company (UNOC), a state-owned entity, is set to borrow $2 billion from Vitol, a global commodities trading unit, to bolster its infrastructure projects—including a crude oil refinery. This decision was revealed by a finance ministry official.

In partnership with UAE-based Alpha MBM Investments, Uganda aims to build a $4 billion refinery with a capacity of 60,000 barrels per day. UNOC will hold a 40% stake, while the UAE company retains 60% ownership. The loan from Vitol Bahrain EC will have a tenure of seven years at an interest rate of 4.92%.

Vitol, already active in Uganda as the main supplier of refined petroleum products, will also finance roads, a petroleum storage terminal, and extend a pipeline from western Kenya to Kampala. This opportunity offers non-traditional financing avenues to support Uganda's national development goals.