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PAU, Stanbic Incubator to build capacity of SMEs in oil sector

Officials display copies of the signed documents.

Mentorship, access to finance and markets are on offer

| THE INDEPENDENT | There are more opportunities that are being availed to small and medium enterprises as Uganda expects to have first oil in 2025.

The Petroleum Authority of Uganda on Feb. 22 entered a partnership agreement with Stanbic Business Incubator Limited (SBIL) and other partners to build the capacity of over 200 Ugandan enterprises along the export crude oil pipeline route to compete for contracts to supply Uganda’s oil and gas sector.

The consortium of partners, which is led by SBIL includes Conexus Oil and Gas, Solid Rock Life and Business, and Living Earth Uganda, will carry out the training of over 200 Micro, Small and Medium Scale Enterprises (MSMEs) in the 10 districts along the East African Crude Oil Pipeline (EACOP) route.

The districts are Hoima, Kikuube, Kakumiro, Kyankwanzi, Gomba, Mubende, Lwengo, Sembabule, Kyotera, and Rakai.

The business development training is one of the three major components of the MSMEs business linkages project along the EACOP project being implemented by the PAU with support from the African Development Bank (AfDB).

The latest development comes following the announcement of the Final Investment Decision (FID) for Uganda’s oil and gas projects at the beginning of this month.

The FID announcement signifies the commitment of the oil companies to invest close to US$ 10 billion to develop Uganda’s oil and gas resources through the implementation of the Tilenga Project in Buliisa and Nwoya districts; the Kingfisher Project in Hoima and Kikuube Districts (approximately US$6-8bn); and the EACOP.

Ernest Rubondo, the executive director at PAU said these investments present enormous opportunities for value addition in the country and there are many opportunities for Ugandan enterprises to participate in.

However, he said, taking up the opportunities will require adequate preparation and the enterprises will have to demonstrate that they have the required capacity to deliver against sector requirements.

“The sector has moved from the season of scarcity to a season of plenty for opportunities in the oil and gas project in Uganda,” Rubondo said, adding that Ugandan companies must recognize this and start working as partners rather than competitors.

Tony Otoa, the chief executive SBIL, said beyond training these MSMEs, the incubator will offer mentorship and opportunities to access to finance and markets.

“Therefore, I can confidently say that today’s signing is our way of ensuring Uganda’s growth is realized and key to this is supporting local enterprises by way of building their capacity to ensure they compete for contracts to supply Uganda’s oil and gas sector,” he said.

At the same event, PAU also signed a Memorandum of Understanding (MoU) with the Private Sector Foundation of Uganda (PSFU) to enhance a partnership towards support to private sector participation in the oil and gas sector.

Stephen Asiimwe, the Chief Executive Officer at PSFU said that the partnership was timely as the private sector was grappling with solving the problem of youth unemployment.

“Through this partnership, the private sector will not only bring on board the necessary skills for capacity building, but we will also harness all the opportunities presented by the huge investment in the oil and gas sector to further enhance Uganda’s economic development, “Asiimwe said.

He added that the oil and gas sector is expected to increase Uganda’s GDP by 22% by end of the construction phase and will employ 14,00 people directly and 45,000 people indirectly.

“As PSFU, we anticipate that at least 30% of the total expenditure on investment in Uganda will be retained and this, we believe, will significantly change the private sector,” Asiimwe added.

The PAU’s mandate is to monitor and regulate the exploration, development, and production, together with the refining, gas conversion, transportation, and storage of petroleum in Uganda.

This includes ensuring that petroleum operations in Uganda are carried out in accordance with the relevant laws, regulations, guidelines, statutes, and in line with international best practice for the petroleum industry. In addition, the PAU is required to monitor national participation in the sector.

On the other hand, SBIL trains and facilitates MSMEs to develop resilient businesses, access ready markets, finances, and other business support resources. Since founding in 2008, SBIL has trained 3,234 Ugandan entrepreneurs attached to 2,007 SMEs.

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