UNOC MoU anchors Equity’s Uganda Oil and gas strategy
Ambitious African lender Equity’s Ugandan unit has entered an MoU with the Uganda National Oil Company UNOC, that potentially opens access to demand for finance by local corporates and SME’s seeking a foothold in the oil and gas value chain.
According to the MoU that was signed on the side-lines of the 8th Annual Oil and Gas Convention, the lender will provide working capital at “competitive” rates to corporates and SMEs populating the Oil and Gas value chains.”
The duo will also collaborate in enterprise development for MSMEs, clean energy use and environmental conservation. The bank will also extend financing to support farmers, education and training for young people and more affordable and accessible health systems for all.
“Wealth creation is the quickest tool to lift our people from poverty and the needs of the oil and gas sector will serve as this vehicle,” said Equity Group managing director, and chief executive Dr James Mwangi.
Mwangi said equity and inclusion in the opportunities generated by Uganda’s oil and gas is going to depend on the availability of financing vehicles tailored to the needs of the different players along the value chain.
“It is when we fund the entire ecosystem with a revolving fund that supports the entire oil sub-sector that we will solve the problem of financial inequity. We have set aside USD6 billion for this but the most important thing is the component of capacity building,” he said.
UNOC chief executive Proscovia Nabbanja echoed Mwangi’s statement revealing that “one of the challenges we have discovered as the local companies is the aspect of financing and that is why we are partnering with reputable organisations like Equity Group to bring financial products that are tailored for the SMEs to participate in the sector.”
Nabbanja caution that it was important that the oil and gas sector should be looked at with a wide perspective. “We should not look at the oil industry in isolation. I think Equity Group has done a phenomenal job using their model in supporting other sectors of the economy and we want to ride on that experience and replicate such models in the oil and gas industry.”
Through programs run by the Equity Group Foundation such as Young Africa Works, the parties will promote financial inclusion and shared prosperity through financial literacy to the population in the oil region, especially women and youth, support for farmers providing food for the ecosystem, health services for supply chain workers, and educational scholarships and leadership opportunities for young scholars.
It will also see the parties provide training in financial education and business management skills to facilitate access to finance for the MSMEs and the matchmaking of joint venture partnerships for players in the oil and gas value chains to enhance collaboration and greater capacity.
In the areas of Clean Energy and Environmental Conservation Equity shall work with UNOC to implement carbon capture programs. This will be achieved through carbon offset initiatives that will allow investments in environmental projects that will balance UNOC’s own carbon footprint.
Under this program, initiatives such as support to households and MSMEs to adopt cleaner sources of energy and modern technologies through training and finance shall be considered. Also support to players within the Commercial and Industrial sectors to adopt cleaner and more efficient production processes and waste management projects aimed at capturing methane from landfill sites and from agricultural activities .
The collaborations will also see the parties support farmers in the oil regions to adopt climate-smart agriculture to reduce green house gases from agricultural activities. Local farmers will also get support in food production along diverse value chains to supply food to not only the oil and gas workers, but also for sale to other markets and support to farmer groups in value addition and processing.