Dangote Industries Limited has proposed offering East African countries a 30% equity stake in its planned $1.7 billion oil refinery in Uganda, according to a report by Nairametrics. The move is designed to secure regional fuel supply and reduce the continent's reliance on imported refined petroleum products.
Details of the Stake Offer
The proposed refinery, to be built in the Kabaale Industrial Park in Hoima District, western Uganda, is expected to have a capacity of 60,000 barrels per day (bpd). The offer of a 30% stake is aimed at governments and state-owned oil companies in East Africa, including Kenya, Tanzania, Rwanda, South Sudan, Burundi, and the Democratic Republic of Congo (DRC).
According to the report, the stake would be offered at a cost proportional to each country's shareholding, with the exact terms yet to be finalised. The refinery is part of a broader strategy by Dangote to expand its refining footprint across Africa, complementing its existing 650,000 bpd Dangote Refinery in Nigeria, which is already the largest single-train refinery in the world.
Strategic Importance for East Africa
The Uganda refinery project is seen as a critical piece of infrastructure for the East African region, which currently imports most of its refined petroleum products from the Middle East and Asia. The facility would process crude oil from Uganda's Lake Albert Basin, where significant oil discoveries have been made by TotalEnergies and CNOOC.
Nairametrics reports that the Ugandan government has been actively seeking investors for the refinery, which has faced delays due to financing and logistical challenges. The Dangote offer could provide a much-needed boost, as it brings the credibility and industrial expertise of one of Africa's largest conglomerates.
Impact on Regional Energy Security
If the deal materialises, it would mark a significant step toward energy self-sufficiency for East Africa, reducing the region's vulnerability to global price shocks and supply disruptions. The refinery is expected to produce diesel, petrol, kerosene, and jet fuel, meeting a substantial portion of local demand.
According to the source, the Dangote Group has already held preliminary discussions with officials from Uganda and other East African nations. The final decision on the stake allocation will depend on the outcome of negotiations and regulatory approvals. The refinery is projected to become operational by 2028, pending the completion of financing and construction.
