By JULIUS BARIGABA

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Uganda is seeking new investors for its $4.5 billion refinery after its Project Framework Agreement (PFA) with a consortium of American and Italian firms expired on June 30.

The Ministry of Energy said Monday that while the Albertine Graben Energy Consortium (AGEC) had made significant developments, it had failed to mobilise critical financing, for which Kampala is seeking new capital.

“There are, however, a number of outstanding aspects, including mobilisation of financing for the project and the Government of Uganda is now open to receiving offers from public sector capital providers to participate in this nationally and regionally strategic project,” the ministry said in a statement.

Energy Permanent Secretary Irene Batebe told The EastAfrican that the Yaatra Africa-led consortium still has a window to be a player in the refinery.

“Yes, but they can still participate in the new process,” she said, explaining that the government did not extend the PFA or sign an implementation project agreement with the consortium after its tenure expired without taking a Final Investment Decision (FID) on which it had been premised when it signed in 2018.

The refinery is to be financed through a debt-equity ratio of 70:30, with the task of raising much of the capital falling on the private developer.

In March this year, Uganda signed a wide-ranging memorandum of understanding with Algeria government-owned energy firm Sonatrach Petroleum Corporation, on midstream and downstream development of Uganda’s oil sector, which includes the refinery.

Sources indicated that the Ugandan government was growing jittery at the time over the lack of progress with the AGEC consortium, which includes American companies Yaatra Africa, Baker Hughes (part of General Electric) and Italian firm Saipem SPA, failing to move the project forward to FID and development.

“The MoU with Sonatrach is [because] we have to look at our own interests. It’s a few weeks to the end of June, and from where we sit, it doesn’t look like they will take FID come the end of June,” a government source working closely with the project told The EastAfrican.

Read: Uganda quietly seeks funds for $4b oil refinery

The other option is to mobilise East African Community partner states – Kenya, Tanzania, Rwanda, Burundi, South Sudan and DR Congo – to commit to taking up equity, while capital investment from publicly owned agencies has also been mooted.

The Ministry of Energy says registered achievements with AGEC, include the completion of the Refinery Configuration or Front-End Loading 2 (FEL-2), the Front-End Engineering Design (FEED), which defines the technical design of the refinery, the project Environmental and Social Impact Assessment (ESIA) study, logistics study and commercial and marketing study.

The refinery shareholding structure was 60 percent owned by the private developer AGEC, while Uganda holds 40 percent, which is to be floated amongst its EAC partner states.

AGEC was contacted for comment but did not immediately respond to our inquiries by press time.

Uganda discovered commercially viable hydrocarbon deposits in 2006 in the Albertine region. The current reserves of the crude oil are estimated to be about 6.5 billion barrels.

The refinery is expected to process 60,000 barrels-per-day.