China ‘understands Africa’s potential’

Uganda’s President Yoweri Museveni has challenged Western companies to invest in African projects as US-Italian consortium signs multi-billion refinery contract.

Museveni said unlike China, which seems to understand Africa's potential and has been active in doing business with Africa, Western companies have been reluctant in taking up projects and investing in the continent.

The president made the remarks on Tuesday as he witnessed the signing of the project framework agreement between the government and the Albertine Graben Refinery Consortium (AGRC) for the development, design, financing, construction, operation and maintenance of the oil refinery in Hoima District.

AGRC is led by an Italian subsidiary of US conglomerate General Electric and also includes Italian oil company Saipem.

The refinery will have a refining capacity of 60,000 barrels per day, relying on crude oil from Uganda. The entire project will be implemented by a special purpose company, the Refinery Company, that will be incorporated by the private investors and the Uganda Refinery Holding Company, which is a subsidiary of the state-owned Uganda National Oil Company. The government said the project is to cost between $3bn-$4bn .

Italian Ambassador Domenico Fornara commended Museveni for his counsel, saying the project would enhance Uganda-Italy business relations.

US Ambassador Deborah Malac congratulated the government upon conclusion of the selection process, saying she hoped more business opportunities would emerge for American companies after this project.

In 2015 the government awarded the contract to a Russian consortium, but the project was re-tendered after the consortium withdrew.