Government plans to invest $500 million in the East African Crude Oil Pipeline (EACOP) and $300m in the oil pipeline project, TheUgandan understands.
A source in the energy ministry said however this depends on the outcome of the current negotiations going on with the investors succeed.
The construction of the 60,000 barrel-per-day refinery is estimated to cost about $4.27 billion (sh15.3 trillion).
Government through the Uganda National Oil Company (UNOC), will acquire 40% of the refinery and 15% shares in the oil pipeline.
A statement released by Energy minister Irene Muloni recently stated that: “The said Uganda government participating interests in both projects shall be wholly owned subsidiaries through the National Pipeline Company (NPC) Uganda and Uganda Refinery Holding Company (URHC) Limited respectively.”
Finance minister Matia Kasaija said he is planning to finance the acquisition of the 15% shares in the pipeline from state coffers but insiders intimate that the financing for the oil refinery may be either through funding of part of the equity or having the lead investor carry government (meet Uganda’s contribution) and recover the investment after the project starts generation revenues.
Muloni has maintained that the target for the first oil to be produced by 2020 still stands.
She says the ministry is still in the first track mode adding that progress is being made on most projects as outlined in the road map.
Her remarks come amid growing concerns that the country might not meet the set target given the fact that global oil prices fell, a drop that forced oil companies such as Tullow Oil and Total to cut back on their expenditures.