Uganda’s long-awaited oil dream is steadily taking shape, yet one critical piece remains behind schedule the oil refinery. From the Tilenga and Kingfisher oilfields to the East African Crude Oil Pipeline (EACOP) and Kabalega International Airport, progress across the Lake Albert Development Project has been impressive. But the Uganda Oil Refinery, envisioned as the centrepiece of the country’s petroleum value chain, is still years away from completion.
While officials describe the delay as a matter of sequencing rather than setback, industry analysts warn that Uganda risks exporting crude for several years before it can refine even a single barrel at home.
The Petroleum Authority of Uganda (PAU) reports accelerated progress on other midstream projects. At TotalEnergies’ US$5 billion Tilenga project, 146 wells have been drilled across ten well pads, with the Central Processing Facility now 57% complete. At the Kingfisher Development Area operated by China’s CNOOC, overall progress has reached 70%. The 1,443-kilometre EACOP pipeline linking Hoima to Tanzania’s port of Tanga has passed the 65% mark, while the US$500 million Kabalega International Airport is nearly finished at 96% completion. These milestones bring Uganda’s target of first oil in 2026 closer to reality.
Against this backdrop of progress, the refinery remains largely on paper. Speaking during the African Energy Week in Cape Town, Michael Nkambo Mugerwa, the General Manager of the Uganda Refinery Holding Company, said construction would begin in late 2025, with operations expected between the end of 2029 and early 2030. Located at Kabaale in Hoima District, the US$4 billion facility will process 60,000 barrels of crude oil per day and is jointly financed by the Uganda National Oil Company (UNOC) and UAE-based Alpha MBM Investments, which hold 40% and 60% stakes respectively.
“This project goes beyond fuel,” Mugerwa said. “We’re developing petrochemicals, fertilizers, and gas processing to capture the full value chain.” He added that the surrounding industrial park has already attracted 15 committed investors and could draw up to US$4 billion in investment, supported by new roads, power, and water infrastructure.
Despite its strategic importance, the refinery’s tangible progress remains modest. According to Lilian Nagawa, the Manager for Technology and Engineering at the Uganda Refinery Holding Company, the Front-End Engineering Design (FEED) by UK-based UOP Honeywell is only halfway done. Land for the refinery and its supporting infrastructure has been acquired, and preliminary site works are expected soon, but major construction will not begin until after the design phase is completed in 2026.
Nagawa emphasised that the refinery is critical for Uganda’s energy independence. “Crude oil from Tilenga and Kingfisher is of little direct use until it is refined into petrol, diesel, kerosene, and LPG,” she said. The plant, designed to meet Euro-5 emission standards, will produce about seven million litres of refined fuel daily roughly matching Uganda’s current demand. Once operational, it is expected to reduce fuel imports, save foreign exchange, and stabilise pump prices.
Energy Minister Ruth Nankabirwa hailed the partnership with Alpha MBM as a breakthrough that avoids the debt-financing challenges faced by the EACOP project. Uganda’s 40% stake, estimated at US$1.6 billion, will be financed through phased government contributions, while Alpha MBM covers the rest. The minister projected significant benefits, including over 30,000 jobs, a US$3.4 billion annual GDP impact, and savings of nearly US$600 million each year once Uganda stops importing refined fuel.
Still, some analysts remain cautious, noting that until full financial closure is reached and contracts are executed, much of the progress remains administrative. Others point out that mega-projects of this nature often depend on large bank syndicates for stability something the refinery has yet to secure.
Uganda’s refinery project has endured a long, bumpy history. First proposed nearly two decades ago, it has suffered repeated delays, shifting partnerships, and failed investor agreements. Previous developers, including Russia’s RT Global Resources and the Albertine Graben Refinery Consortium, were unable to reach financial close, forcing the government to restructure the project several times before sealing the current deal with Alpha MBM.
Part of the delay lies in the refinery’s complexity. Unlike drilling or pipeline projects, a refinery must be uniquely designed to suit the chemical composition of Uganda’s “sweet but waxy” crude oil. The project’s cost about US$4 billion makes it one of the most capital-intensive ventures in Uganda’s history. Meanwhile, global shifts toward renewable energy and electric mobility have made investors more cautious about long-term fossil fuel projects.
Even so, Energy Ministry Permanent Secretary Irene Bateebe insists that the refinery has been designed to remain relevant in a changing energy landscape. “This refinery strengthens Uganda’s energy security and ensures relevance even as the world transitions,” she said. “It integrates with the petrochemical industry producing diesel, petrol, jet fuel, and raw materials for plastics and fertilizers.”
The refinery’s completion would have regional significance as well. Once operational, it could supply fuel to neighbouring Tanzania, Kenya, South Sudan, and the Democratic Republic of Congo, reducing the region’s reliance on imports from the Gulf. For Uganda, this could translate into economic leverage and steady export revenue. However, environmentalists warn that the refinery could deepen Uganda’s carbon footprint at a time when global attention is shifting to renewables. Government officials counter that the plant’s Euro-5 design and parallel investment in hydro, solar, and nuclear energy will help balance the environmental impact.
For Uganda, the refinery represents more than industrial infrastructure it is a symbol of self-reliance. Without it, the country will continue exporting crude while importing refined fuel, a paradox that undermines the long-term vision of value addition. The government’s cautious, state-led approach has protected Uganda from the resource curse that has plagued other African oil producers, but it has also slowed progress.
The refinery’s delay underscores both the promise and the challenge of Uganda’s oil journey ambitious, deliberate, but burdened by bureaucracy, financing constraints, and shifting global tides. The government insists that the project will be delivered, but time is closing in. Unless the refinery catches up with the pace of the other oil ventures, Uganda’s “first oil” may represent only a partial victory a logistical achievement rather than a transformation.
For now, Uganda’s oil dream remains alive but incomplete. The refinery, the missing link in that vision, must finally rise to match the speed of the projects that surround it if the country’s promise of self-sufficiency is to become more than a hope written into timelines.