UGANDA Law and Practice Contributed by: Onyango Owor, Miriam Babirye Kaggwa and Namugera Joel Peter, Onyango & Company Advocates
ity for electricity distribution to the state, which is expected to, among other things, enhance service efficiency and reduce electricity costs to state-led power distribution. In the buyout for its concession assets, Umeme received USD117 million (approxi- mately UGX428.99 billion); however, it is claiming an additional USD117 million for its unrecovered investment costs, which will now be subject to arbitration at the London Court of Arbitration. • Commissioning of Karuma Hydropower Station – On 26 September 2024, the government commis- sioned the 600 MW project, whose execution and conclusion have taken over 20 years due to various challenges. The project cost USD1.7 billion, with 85% of it financed through a loan from China’s Exim Bank and the remaining 15% by the govern- ment. The Karuma project is a stepping stone for Uganda to achieve its target of 52,000 MW by 2040. • Heightened activity in oil and gas – The drilling at the Tilenga and Kingfisher projects is advanc- ing, with the first oil production expected to start in 2026 at 21,000 b/d, increasing to 145,000 b/d in 2027. Uganda has signed an agreement with a UAE-based Alpha MBM Investments to construct a USD4 billion refinery, with its completion projected for 2028. This refinery is crucial to Uganda’s plan to reduce reliance on refined fuel imports, the aim being to become a mid-sized crude oil exporter, with expected exports peaking at 171,000 b/d in 2028. Despite the different legal actions surround- ing environmental rights as well as compensation, the construction of the 1,443 km East African Crude Oil Pipeline (EACOP), designed to transport 216,000 barrels of crude oil per day from Uganda to Tanzania, has reached approximately 69% com- pletion. • Construction of sports infrastructure – With Uganda set to co-host the PAMOJA Africa Cup of Nations 2027 alongside Kenya and Tanzania, there has been heightened government investment in the construction of sports infrastructure, including the Hoima City Stadium by Turkish-based Summa International Construction Company, which is 100% complete, and Aki Bua Stadium in Lira by Egyptian firm SAMCO National Construction Company, which is approximately 20% complete. Additionally, there is an ongoing upgrade of Man-
dela National Stadium, which has been the only standard stadium in the country for over 28 years. • Renewable energy has seen mixed momentum – There has been strong growth in hydropower and geothermal power, driven by the Energy Policy 2023’s target of 52,000 MW by 2040, but solar investments have slowed due to the Electricity Regulatory Authority’s April 2025 tariff cut from 7.1 to 5.1 cents/kWh and grid stability concerns, prompting a “wait-and-see” approach. • Business approaches have noticeably shifted towards greater ESG integration and Paris Agree- ment alignment, with some investors prioritis- ing low-emission energy operations and carbon market participation, now that the National Climate Change Act is fully operational with the regulations in place. 1.3 Access to the Energy and Infrastructure M&A Market In Uganda, investors in the energy and infrastructure sector primarily access the M&A market through direct government negotiation via memorandums of under- standing (MoUs) or state-to-state agreements, private acquisitions of stakes in existing projects, and joint ventures – eg, with UNOC for oil and gas. Key investors are predominantly foreign entities: • European firms like TotalEnergies (operator of the Tilenga oil project with a 56.67% stake, and the EACOP with 62%, plus its recent Bujagali acquisi- tion) and SN Power (former hydropower stakehold- er, now under TotalEnergies). • UAE-based companies like Alpha MBM Invest- ments LLC (which has a 60% stake in the USD4 billion refinery it will be constructing, while UNOC owns 40%). • Chinese companies like the China National Off- shore Oil Corporation (CNOOC) has an 8% stake in the EACOP and a 28.33% stake in the Tilenga oil project. 1.4 Energy and Infrastructure Projects Aside from the oil and gas projects on the government front, Uganda’s other major planned energy projects emphasise renewables, with hydropower dominating:
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