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Kampala, Uganda | THE INDEPENDENT | The Africa Finance Corporation (AFC) is to provide over 353 billion shillings ($95.25 million) for the transportation of fuel to Uganda through Lake Victoria.
According to a statement from Africa Investment Corporation (AFC), part of the money will be used to construct two barges that will deliver fuel from Kisumu across Lake Victoria to Uganda.
The funding is to be provided to Mahathi Infra (U) Ltd which operates MT Kabaka Mutebi II ship which has since last Decembers been transporting fuel from Kisumu to the Bukasa-Bwerenga terminal in Waksio district.
Mahathi Infra (U) Ltd is emerging as one of East Africa’s largest oil and gas downstream players targeting to further connect to Rwanda and DRC markets.
It is expected that the two barges on Lake Victoria will provide a more efficient and less carbon-intensive alternative to traditional trucking.
The Africa Finance Corporation said the financing will also support enabling infrastructure including 14 petroleum storage tanks, 20 truck loading bays, a jetty, and a parking lot with a capacity of 50 trucks.
It is expected that those facilities will not only transform petroleum product transportation in Uganda but also significantly reduce cost, and transportation time, and eliminate carbon emissions associated with transportation by trucks through Malaba and Busia borders.
A single barge trip on Lake Victoria will replace 200 trucks on the road daily and eliminate 100,000 truck journeys on East Africa’s busiest transport route – from Kisumu, Kenya, to Kampala, Uganda. This reduction in road traffic will ease congestion and minimize issues such as product adulteration, theft, and accidents.
It will also alleviate working capital burdens for small and medium-sized distributors, enabling them to procure products directly from the Mahathi storage facility, and reducing delivery time from seven days to immediate access.
Africa Finance Corporation President, Samaila Zubairu, said the provision of the funding is a significant milestone in their mission to sustainably address Africa’s infrastructure challenges.
“Through this investment, we are contributing to the transformation of petroleum transportation in Uganda with a lower-emissions alternative that cuts costs significantly, reduces road congestion, and improves mobility and accessibility for people, leading to sustainable economic growth and productivity.” Said Zubairu.
The AFC said that the self-propelled barges are designed in accordance with international Environmental and safety standards to prevent fuel leakage.
“They will decrease greenhouse gas emissions by over 95%, from 172,103 tonnes to 7,692 tonnes of CO2, annually on the basis that one self-propelled barge has the equivalent storage capacity of 200 trucks and a significantly shorter travel distance over Lake Victoria of about 250km compared to the 350km road route” reads part of the statement.
Efforts by Uganda Radio Network to reach Mahathi Infra Uganda Limited’s Chairman and Shareholder, Captain Mike Mukula for more details about the latest funding were futile.
Mukula in the past told URN that they were determined to ensure that they change and transform the way Uganda transports its petroleum products.
Before Mahathi Infra Uganda Limited ventured into the fuel storage and transportation sector, most of the fuel was being transported by truck and rail.
Uganda last suffered a major fuel crisis at the end of 2021 following a delay in the clearance of trucks at the Busia and Malaba borders.
MPS investigating the crisis noted that Uganda National Oil Company (UNOC) had partly blamed the crisis on the absence of a bulk and efficient fuel transportation system.
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