Russian firm pulls out of Uganda’s $4bn oil refinery

Uganda Energy-Minister-Irene-Muloni

Irene Muloni, Uganda Energy Minister

03 July 2016, Kampala – A Russian consortium RT Global Resources, which was announced as the best preferred bidder for the financing and construction of the $4 billion greenfield oil refinery in Hoima in western Uganda has walked away from the deal in unclear circumstances.

Sources in the Energy Ministry confirmed on Thursday that the Russian consortium which had been selected to negotiate the principal agreements had “failed to negotiate in good faith” and had “failed to execute” a shareholders’ agreement.

The sources also said the ministry had cashed in a $2 million bid bond which RT Global Resources consortium had executed with a local bank.

The consortium was a surprising choice when the announcement was first made in February 2015. Led by Rostec, a Russian defence and technology corporation whose businesses include manufacturing of weapons such as the AK-47/Kalashnikov rifles, it also included Russian oil producer Tatneft and VTB Capital, the investment banking unit of Russia’s second-largest lender VTB. Others partners included GS and Telconet Capital Partnership from South Korea.

 

 

  • The East African
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