Following Parliamentary approval, the Uganda National Oil Company (UNOC) has formally executed financing agreements to borrow up to USD 2 billion (about UGX 7.12 trillion) from global petroleum trader Vitol Bahrain E.C. to support strategic national oil and infrastructure investments.
The financing, to be repaid over seven years, is expected to unlock several key projects across Uganda’s petroleum value chain. These include the development of new greenfield petroleum storage facilities at Namwabula in Mpigi District, expansion of the Jinja petroleum terminal, extension of petroleum products pipelines from Kenya, refinery-related infrastructure, and other national and regional logistics projects aligned with Uganda’s broader economic transformation agenda.
Government officials say the funding will enhance logistical efficiency, strengthen fuel supply reliability, and support Uganda’s ambition to position itself as a regional petroleum hub. The investment is also seen as critical to unlocking economic growth through improved energy security and modernised infrastructure.
The financing strengthens UNOC’s mandate as the government’s commercial arm in the petroleum sector, including its role in petroleum products supply, infrastructure development, and participation across the oil and gas value chain. The government reaffirmed that all borrowed funds will be utilised prudently and in strict compliance with existing laws and regulations, under the oversight of relevant authorities.
Parliament approved the UNOC loan during a plenary sitting on December 17, 2025, which also cleared three additional loan requests totalling UGX 9.622 trillion. However, the approval came amid growing concern over Uganda’s rising public debt, which stood at UGX 119.4 trillion as of September 2025, according to the Ministry of Finance.
Opposition Leader Joel Ssenyonyi warned that Uganda’s debt-to-GDP ratio, currently at 51.3 percent, places the country in what he described as a “red zone,” urging the government to ensure borrowing supports productive and revenue-generating investments.
The approval coincided with the tabling of the National Budget Framework Paper (NBFP) for FY 2025/26–2030/31 by the State Minister for Finance (General Duties), Hon. Henry Musasizi. The NBFP emphasises full monetisation of Uganda’s economy through commercial agriculture, industrialisation, digital transformation, expanded social services, and market access.
Key oil sector projects highlighted include Tilenga, Kingfisher, the East African Crude Oil Pipeline (EACOP), and Kabalega International Airport, which the government expects to drive exports, revenue, and job creation. The NBFP projects economic growth of 10.4 percent in FY 2026/27, driven largely by the commencement of oil production.
The framework was referred to Parliament’s Budget Committee and sectoral committees for further scrutiny, marking a shift toward alternative financing approaches to advance oil-linked and national infrastructure projects amid tightening global capital for fossil fuel investments.
