Uganda’s long-delayed $4 billion oil refinery project is making significant progress following the signing of new contracts backed by UAE investors, marking a critical step toward the country’s ambition to become a regional energy hub.

The landmark agreement between the Ugandan government and UAE-based Alpha MBM Investments LLC, led by Sheikh Mohammed bin Maktoum bin Juma Al Maktoum of Dubai’s royal family, sets the stage for a Final Investment Decision (FID) scheduled for July 2026, with construction expected to begin soon after. Alpha MBM will partner with the Uganda National Oil Company (UNOC) to develop the refinery, with the UAE firm holding a 60% majority stake and UNOC controlling the remaining 40% through the Uganda Refinery Holding Company.

Set to be built in Kabaale, Hoima District, the 60,000-barrel-per-day facility will be one of East Africa’s largest downstream energy investments once operational. It will include a 212 km finished-product pipeline to Mpigi, a 320-million-liter storage terminal in Kampala, and a water abstraction facility in Hoima. The refinery is targeted to begin operations in 2030.

Speaking on the development, Maimouna Oumarou, media founder and trade facilitator, said the project represents a “new chapter” in Uganda’s pursuit of national energy sovereignty. She highlighted the refinery’s potential to reduce Uganda’s current reliance on petroleum imports—currently about 90%—and to supply petroleum products to neighboring countries including Tanzania and the Democratic Republic of Congo.

“This project is positioned to become one of East Africa’s most strategic energy assets,” she said in a post on LinkedIn.

Beyond energy security, the project is expected to anchor industrial growth in the Kabaale Industrial Park, attracting investments in petrochemicals, fertilizers, and downstream manufacturing. It is also projected to create thousands of jobs and expand tax revenues, reinforcing Uganda’s broader economic development goals.

Despite the optimism, the project faces challenges, including environmental risks to Lake Albert’s ecosystem, high costs of approximately $62,000 per barrel of processing capacity, and past difficulties securing financing. The project will now be funded entirely through equity following previous hurdles with international debt.

Analysts view the Uganda Refinery Project as a bold step toward strengthening East Africa’s energy independence while laying the groundwork for broader industrialization and regional economic integration.