The Ugandan government has launched a search for new investors for the construction of a $4b oil refinery in Hoima, after Russia’s RT Resources pulled out of the project, All Africa reported.
The Ministry of Energy and Mineral Development’s Assistant Commissioner, Dozith Abeinomugisha, said that Uganda has restructured the entire oil refinery project in hope to find a new investor. He added: “we are looking at restructuring the project to make it public-led instead of private sector-led, so that government takes majority of the shares and the private developer takes a smaller share.”
Uganda was expecting to conclude negotiations in September with the consortium of companies that won the contract to build the refinery, which included Russian firms RT Global Resource and VT Bank, as well as South Korean conglomerate GS, according to Uganda Oil. Yet, in July 2016, the lead investor RT Global Resources opted out of the deal during the negotiation process. It was expected to fund 60% of the project, with Uganda financing the remaining 40% stake.
Abeinomugisha concluded that the alternate bidder, SK Engineering and Construction, is not interested in any negotiations with Uganda. Therefore, the government has re-launched a search for a new investor. If government succeeds in finding an investment partner, both parties will form a refining company that will undertake financing, construction, and operation of the facility.