The state-owned oil company of Uganda UNOC has confirmed ongoing plans to borrow $2 billion from a unit of global commodities trader Vitol to finance the construction of a crude oil refinery and other infrastructure projects.
This was disclosed late Tuesday during a presentation to parliament by Uganda’s junior finance minister Henry Musasizi.
Musasizi told lawmakers that the money will be borrowed from Vitol Bahrain EC (VBA) as a seven-year tenor loan which will have an interest rate of 4.92%.
He asked them to approve the credit line, which was eventually sanctioned after obtaining majority votes.
Borrowing from Vitol “presents an opportunity to access non-traditional financing to implement. ..projects and support the government in developing national infrastructure,” Musasizi argued.
Vitol Bahrain EC already operates in Uganda as the sole supplier of refined petroleum products to UNOC, which then sells it to retailers across the country.
Uganda’s bold multibillion dollar refinery ambitions
Despite having 1.4 billion barrels in recoverable reserves, landlocked Uganda currently imports most of its refined petroleum products, mainly from Kenya and Tanzania.
The government aims to reduce reliance on imports and meet rising fuel demands by developing domestic refining capacity, including plans for a 60,000 bpd refinery.
Early this year the east African country signed an agreement with UAE-based Alpha MBM Investments to build the $4.5 billion plant. The UAE firm will have a 60% stake in the facility while UNOC retains 40%.
The refinery will be strategically positioned within the Kabalega Industrial Park in Hoima, from where it will tap vast oil reserves of the Albertine Graben. The first oil is targeted for next year, during which time it also expects to complete works on a $5 billion crude oil pipeline.
The planned refinery project will include a 212-km multi-product pipeline and is skewed toward producing petrol (30%), diesel (25%), kerosene (15%), jet fuel (10%), heavy fuel oils (10%) and LPG (5%).
Kampala says the project could fetch more than $3.3 billion annually to Uganda’s GDP and over 30,000 jobs, which potentially makes it the most consequential project in history.
In addition to the refinery, the $2 billion will also be used to finance construction of roads, a petroleum products storage terminal and extension of a petroleum pipeline from western Kenya to Uganda’s capital Kampala, Musasizi said.
Uganda’s recent infrastructure loan request
In September, Uganda’s Ministry of Finance announced plans to borrow $358 million from regional and private lenders to fund major infrastructure projects, including a critical high‑voltage transmission line to South Sudan.
Junior Finance Minister Henry Musasizi confirmed that the loan will specifically finance the transmission line linking Uganda’s national grid to its northern neighbour.
The funds will also support road construction to the Republic of Congo and the expansion of clean water access. The financing is expected to come from the African Development Fund (ADF), the Arab Bank for Development in Africa and Standard Chartered Bank.
This request follows ADF’s earlier approval of a $260 million package in December 2024 to finance the Uganda–South Sudan interconnection project.
That package covers the construction of a 299‑kilometre transmission line between Gumbo and Olwiyo in Uganda, the establishment of two new substations at Gumbo and Biba, and the expansion of the Karuma and Olwiyo substations.
Looking ahead, Uganda is also seeking at least $2 billion in new financing from the World Bank over the next three financial years to support key economic development projects across the country.
