November 14—The Albertine Graben Refinery consortium, which is negotiating with the Uganda government over the construction of new oil refinery, has posted a $2 million commitment bond as a show of good faith to sign the Project Framework Agreement (PFA) for the proposed $4 billion refinery.
According to Deep Earth International (DEI), a market research firm that covers developments in the extractive and energy sectors in East Africa, according to the government’s schedule, the talks for the PFA were supposed to have been concluded in September. That deadline was missed and it is not clear when the two parties will conclude the negotiations.
Uganda, through the national oil company, is expected to take a 40% stake in the refinery, while the investor carries 60%. Up to 70% of the financing of the refinery will be through debt with the other 30% coming in as equity from the project partners. In August, the government announced that it had “agreed core project terms” for the refinery project.
DEI says when the consortium signs the PFA, they will be required to finance all pre-Final Investment Decision activities up to $100 million. The Pre-FID activities, according to the terms of the arrangement, will include market studies, logistics studies, technology licensing, refinery configuration studies, Environmental and Social Impact Assessment, and Front End Engineering Design.
For now, a consultant that government chose, Kaika Investco, is already monitoring and evaluating the Resettlement Action Plan for the people who were evacuated to pave way for the construction of the refinery.
Top officials from the consortium met President Yoweri Museveni in October, seeking further political backing for the project. The Albertine Graben Refinery consortium includes: General Electric Oil and Gas, YAATRA Ventures LLC, Intracontinent Asset Holdings Ltd (IA) and Saipem SpA.