Uganda oil refinery gets funding

oil33Uganda-Tanzania Refined Oil Products Pipeline Project has received funding from the New Partnership for Africa’s Development Infrastructure Project Preparation Facility (NEPAD-IPPF).

The 1,403 kilometre oil refinery is among the eight projects set to get total funding of $ 14.83 million funding. The oil project was approved with oversight from the East African Community Secretariat.

Laying of the pipeline from the oilfields in Lake Albert north-west of Uganda to Tanga port and associated civil works will cost an estimated $12 billion It is expected that at the end of construction in 2020, the 24-inch pipeline will deliver about 200,000 barrels of crude oil per day.

Speaking during the press conference early last year, the director of Total Uganda Adewale Fayemu said of the $12 billion set aside for the project, some $4 billion would be spent on laying down of the pipeline while $8 billion would be spent on other associated expenses such as refining of oil.

NEPAD-IPPF is a multi-donor Special Fund hosted by the African Development Bank (AfDB), established under the G8 as part of the support to the NEPAD African Action Plan and is managed in close partnerships with the African Union Commission (AUC) and the NEPAD Agency. Donors supporting NEPAD-IPPF include Canada, Denmark, Germany, Norway, Spain and the UK.

Since its establishment in 2005, NEPAD-IPPF has approved 72 grants for complex, cross-border regional infrastructure projects resulting in downstream financing of US $7.88 billion, demonstrating the high leverage effect of well-prepared projects.

Under its current Strategic Business Plan (SBP) for the five-year period, 2016-2020, NEPAD-IPPF requires funding of about US $250 million to prepare 80 to 100 regional infrastructure projects expected to generate US $25 billion in infrastructure investments.

NEPAD-IPPF is also increasingly linking its project preparation work to financial closure and part of the thrust of its new business orientation is to engage early with project developers, financiers and investment houses to ensure that NEPAD-IPPF prepared projects respond better to investor needs.

“NEPAD-IPPF is a tested brand across Africa in supporting African countries to prepare complex, cross-border regional infrastructure projects and to bring them to bankability and therefore offers a total-project-development-solution,” said Simuyemba. He also observed that NEPAD-IPPF unlocks business opportunities across the “infrastructure value chain”, not just in advisory services, but also financing, construction, equipment supply, technology and skills as well as operations and maintenance.

The NEPAD-IPPF has continued to support African countries to strengthen regional infrastructure connectivity by providing grants for project preparation and development for complex, cross-border regional infrastructure projects in energy, transport, ICT and trans-boundary water.

This directly supports Africa’s integration and industrialization efforts as well as trade in goods and services and helps to improve the quality of lives of Africans by improving access to infrastructure services – electricity, transport, communications and water.

NEPAD-IPPF provides grants to African countries through Regional Economic Communities (RECs) and specialized regional infrastructure institutions such as Power Pools to undertake feasibility, technical and engineering designs, environmental and social impact assessment studies, as well as preparation of tender documents and transaction advisory services to make projects bankable for financing and implementation in support of Africa’s socio-economic transformation.

Taking stock of achievements during 2016 at the Business Strategy Workshop for NEPAD-IPPF held at the headquarters of the African Development Bank (AfDB) in Abidjan, Côte d’Ivoire, recently, Shem Simuyemba, NEPAD-IPPF Fund Manager, informed the gathering that during 2016, NEPAD-IPPF had approved a total of US $14.83 million for the preparation of eight regional projects covering energy, transport and water.

Five energy/power projects were approved, two in West Africa, two in Southern Africa and one in East Africa. In East Africa, NEPAD-IPPF funded the Uganda-Tanzania Refined Oil Products Pipeline Project with oversight from the East African Community Secretariat.

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