The company is said to be an investment arm of a prominent member of the royal family of the United Arab Emirates (UAE), Sheikh Mohammed bin Maktoum bin Juma Al Maktoum. Sheikh Al Maktoum last year visited Uganda as part of the efforts to expand his business empire.
Around the time that he and his entourage were in Uganda, the project framework agreement (PFA) between the government and an American-led Albertine Graben Energy Consortium (AGRC) had come to an end and the government decided not to renew it.
The minister of Energy and Mineral Development, Ruth Nankabirwa says that a memorandum of understanding (MoU) was signed on December 22, 2023, between the Government of Uganda (GOU) and Alpha – outlining cooperation and negotiation terms for the refinery.
She said negotiations of the key commercial agreements between the government and Alpha commenced on January 16, 2024, and are expected to be concluded within three months. Expressions of interest (EOIs) have been received from potential investors including Alpha MBM Investments LLC, Africa Economic Aid Limited, Bakertilly Middle East Limited, and St. Ignatius Energy.
The Albertine Graben Energy Consortium (AGRC) had suggested raising some of the money to construct the refinery by listing it on the stock exchange, but now Nankabirwa says that Alpha has proved that it has money to move forward with the project that is already behind schedule. Uganda expects commercial oil production before the end of 2025.
Nankabirwa said that as government, they hope that the new partner fast-tracks the process that will lead to the construction of 60,000 barrels of oil per day (bopd) Greenfield refinery in Hoima. The final investment decision (FID) by the American-led consortium should have been taken in June 2023.
The permanent secretary at ministry of Energy, Eng Irene Bateebe said that with the design they are taking with Alpha, they expect that at the time of signing the commercial agreements, an FID would have been taken.
“Because immediately we sign the agreements, we shall see some works commence. So that is an innovative way, the works commence based on the equity of the two partners,” she said.
The two partners in the project will be the private investor who will hold a 60 per cent shareholding and GOU’s National Oil Company with a 40 per cent shareholding.
“And for the National Oil Company, we have already begun programming their equity contribution. They have some portion and for the next financial year 2024/2025, we equally programmed some financial contribution. So they should be able to put on table their equity” Bateebe revealed.
Alpha becomes the third investor to take part in the refinery project in Uganda. In February 2015, the government selected a consortium led by Russia’s RT Global Resources LLC and South Korea’s SK Engineering & Construction Co. to build and operate the refinery.
The negotiation about the PFA with the Russian-led investors failed leading to a new bidding process that had the American-led AGRC selected as a preferred bidder.
The Front-End Engineering Design (FEED) for the refinery project was completed by (AGEC), the then lead investors in August 2021, and approved by the Petroleum Authority of Uganda (PAU) in July 2022.