South Africa’s COEGA to open up Kabalega Industrial park

Uganda has chosen COEGA Development Corporation, South Africa’s leading Special Economic Zone operator, as its preferred partner for the opening up of the Kabalega Industrial park, which forms part of the oil refinery project.

The selection of COEGA is the strongest indication that government is committed to moving ahead with its oil refinery project since it cut ties with the Albertine Graben Energy Consortium at the end of June 2023.

The South African company will partner with the Uganda National Oil Company, which handles Uganda’s commercial interest in the oil and gas industry. The team from COEGA has already been to the Kabalega Industrial park, and is said to map out a plan on how to prepare the park for the different investments.

The park is a nearly nine square kilometre span of land. The industrial park will be zoned out to cater for heavy industrial, light industrial, commercial, residential, agro-processing, and civic zones.

The land will be parceled out after cabinet approves UNOC’s land allocation policy. Uganda’s government has decided to embark on its oil refinery project using a public-funded model, 10 years after the first private consortium – Russia’s RT Global – was handed a contract to construct the refinery.

The exit of the second consortium in June this year led to a change of strategy. Uganda is looking to build a 60,000 barrels of oil per day refinery, alongside a private-sector-led 1,443km crude oil export pipeline from Hoima to Tanzania’s Chongoleani peninsula.

According to Ugandan law, the refinery, which needs an investment of about $4 billion, has the first right of call on the oil resources. The pipeline, on the other hand, will pump 212,000 barrels of oil per day at peak.

Uganda has so far discovered between one billion and 1.4 billion barrels of recoverable oil. The crude oil export pipeline is expected to be commissioned sometime in 2025, while the government expects to launch the oil refinery in 2028.