The Albertine Graben Refinery Consortium (AGRC) Conclude the agreement on capital investments or FID this week on the sidelines of the US-Africa Leaders’ Summit in the US capital, Washington, according to a statement from State House.
“The announcement brings Uganda and the region one step closer to a long-held dream: to add value to our resources, and achieve energy security and economic prosperity for all its citizens,” Mr Museveni was quoted as saying.
AGRC’s executives were led by Ms Rajakumari Jandhyala, the chief executive of Washington DC-based Yaatra Ventures LLC and the presidents of Africa Finance Corporation (AFC), Eastern and Southern Trade and Development Bank (TDB), Honeywell, Baker Hughes.
AGRC is a special purpose vehicle formed by America’s General Electric International Operations Company, Inc, Italy’s Saipem SpA, Mauritius-based private equity fund Intra-continental Asset Holdings (IA), and Washington DC based Yaatra Ventures LLC.
The consortium had been beaten to the tender by a Chinese joint venture, but the deal was flipped on the premise of balancing foreign interests in Uganda’s oil sector.
The upstream (operation of the oil fields) are French TotalEnergies EP and China’s CNOOC which also carry stake in midstream (East African Crude Oil Pipeline).
The refinery once developed will be the 1st American-Italian investment in Uganda.
AGRC was handed the refinery tender on the basis of, among others, the reputable companies in its stable (General Electric with an estimated turnover of $300 billion and Saipem SpA), which meant “good corporate governance and strong project risk management principles” capable of attracting private equity financing.
The refinery is expected to be financed in a Public Private Partnership arrangement of 60:40 ratio.
The government’s 40% equity share is equivalent to Shs2 trillion ($500 million), and was defined in December 2017 by the Uganda National Oil Company (Unoc) shareholders; the ministries of Finance and Energy, at their last annual general meeting.
Uganda’s share will be carried through the Uganda Refinery Holding Company, a subsidiary of Unoc, which is mandated to manage the country’s commercial interests in the oil sector.
Kenya and Tanzania had initially offered to buy 2.5% and 8% stakes respectively, as part of Uganda’s 40% share. TotalEnergies E&P also offered to buy a 10% stake, leaving the government with roughly 19% stake. It remains unclear how far discussions progressed.
