Russia’s RT Global Resources Wins Bid for Uganda’s Refinery Project

RT Global resources has been selected as the preferred bidder for the Uganda Refinery Project  following evaluations by a team from the Government and Taylor Dejongh, Government’s Transaction Advisor.

“We are pleased that the two bidders responded to the Request for Final Offers, from which RT Global Resources emerged as the Selected Preferred Bidder.  We have confidence that we will execute the Project Agreements and go ahead to develop Uganda’s Refinery Project,”  says Minister for Energy and Mineral Development Eng. Irene Muloni.

Following the completion of the exercise Minister the Government will then proceed to hold negotiations on the principal agreements with RT Global Resources led consortium (Telconet Capital Ltd Partnership, VTB Capital PLC, Tatneft JSC and GS Engineering & Construction Corporation) starting in March 2015 with an aim of reaching an agreement within 60 days.

“The objective of these negotiations is to conclude the Project Agreements to the satisfaction of Government and the Lead Investor. These include the Project Framework Agreement, Shareholders Agreement, Implementation Agreement and the Escrow Agreement”, Mr. Fred Kabagambe-Kaliisa, Permanent Secretary in the Ministry added.

Thereafter different project contracts have been executed the lead investor and Government will constitute a Refinery Company that will take forward the engineering and finalise the financing aspects for the development of the refinery.

The ministry is however quick to say that the other alternate bidder SK Engineering and Construction could still have a chance should RT Global resources if at the end of the negotiations with RT Global Resources, Government is not satisfied that the major issues in the agreements do not meet its satisfaction.

“The SK Engineering and Construction led Consortium has been a strong competitor throughout the selection process leading to the final offer, however they came short on key requirements of Government including contribution to the private share and operating plan”, Mr. Kabagambe-Kaliisa added.

Members of the SK Engineering and Construction led Consortium include SK – KDB Global Investment Partnership Private Equity Fund, China State Construction Engineering Corporation Ltd, Haldor Topsoe A/S and Maestro Oil and Gas Solutions (MOGAS) DMCC.
Uganda’s refinery project is to be developed under a public private partnership (PPP) arrangement with the Government holding 40% equity with the East African Community Partner States also having a substantial interest.

Besides the construction of the capacity 60,000BPD refinery the project also includes development of crude oil and product storage facilities on site, as well as a 205-kilometer product pipeline to a terminal near the capital city, Kampala.

To date the government says it has compensated 74% of the Project affected persons in 29 Square kilometers from which the refinery will sit with the process of compensating the rest ‘in final stages’

The first phase of the refinery is expected to be in place by 2018.