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Albertine consortium gave sh7.4b before signing for refinery project

Energy minister Irene Muloni and Albertine Graben Refinery Consortium team after signing the agreement.

Kampala, Uganda | THE INDEPENDENT | The Albertine Graben Refinery Consortium (AGRC) posted a commitment bond of USD 2 million (over 7.4 billion Shillings) before it signed the Project Framework Agreement with the government for the oil refinery.

Emerging information from the Directorate of Petroleum at the Ministry of Energy indicates that the commitment bond was posted around August 2017 when negotiations with the consortium begun. The government and Albertine Graben Refinery Consortium (AGRC) last week signed an agreement for the proposed oil refinery after protracted negotiations.

URN has seen documents indicating that Albertine Graben Refinery Consortium (AGRC) made up of General Electric (GE) Oil and Gas, YAATRA Ventures LLC, Intercontinental Asset Holdings Ltd (IA) and Saipem SpA had to post the USD 2 million binding it to the negotiations.

The government had on the other hand, according to sources, made a commitment that it was exclusively negotiating with Albertine Graben Refinery Consortium (AGRC) during the period of formulation of the Project Framework Agreement.

Full details of the Project Framework Agreement signed at State House Entebbe remain scanty but sources indicate that the Consortium is expected to provide 370 billion shillings (USD-100 million) activities leading to final investment decision (Pre-FID).

The activities to be funded by the consortium include Front End Engineering Design (FEED), conduct refinery configuration studies and Environmental and Social Impact Assessment (ESIA) and market studies among others.

The Acting Director Directorate of Petroleum, Honey Malinga was reluctant to comment about latest details on the commitment bond and USD 100 million funding to be provided for pre-Final Investment Decision.

He referred to the Permanent Secretary, Robert Kasande. Kasende could, however, to be reached by phone for comment. The refinery construction is expected to cost USD 4 billion funded by the Albertine Graben Consortium and the government through National Oil Company.

Albertine Graben Consortium (AGRC) is expected to raise most of the funds for the refinery construction. While the signing of the Project Framework Agreement has been viewed as a key milestone for the proposed oil refinery project, there is fear that it may not be completed by 3nd of December 2020 when first oil is expected.

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