The Uganda National Oil Company is slated to hold a 40% equity stake in the country’s upcoming oil refinery, with the remaining share controlled by Alpha MBM Investments LLC. The project has drawn attention from oil stakeholders across East Africa, including assurances from Kenya Pipeline that it does not pose a threat to their operations.
What Kenya Pipeline Said
Kenya Pipeline Company (KPC) managing director Joe Sang stated that the refinery project would not affect their operations, noting that it would take up to 15 years for Uganda to begin refining oil. KPC is currently in the process of offering 11.81 billion ordinary shares, representing a 65% ownership stake, through an initial public offering (IPO), priced at Sh9 each.
According to the IPO information memorandum, investments are expected to be funded through a combination of internally generated cash flows and innovative financing structures, including debt capital markets, special purpose vehicle project financing, joint ventures, and partnerships. Approximately 90% of Kenya Pipeline’s refined petroleum – around 2.5 billion liters annually – is exported to Uganda, making it a key transit market.
Kenya Pipeline remains optimistic that Uganda will continue to import refined petroleum products “for the foreseeable future,” asserting that global oil markets are fully integrated and that oil competes on production and scale economics. The company added that it will take a significant amount of time for regional consumption levels in East Africa to justify crude refining at a competitive scale.
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