The Independent Uganda: You get the Truth we Pay the Price
Kampala, Uganda | THE INDEPENDENT | Uganda National Oil Company (UNOC) needs at least Three Trillion Shillings in capital to sufficiently carryout government business in the oil sector.
Proscovia Nabbanja, the CEO of UNOC told reporters in Kampala on Wednesday that the money will be needed in a phased manner in five years. This means each year, the company should be receiving at least 618 billion shillings.
The company represents the government’s interest in the oil sector. Government is expected to take stakes in key projects like the pipeline and the refinery. But it has to pay its part.
For instance, government has to fund a 40% share in the refinery to the tune of $480m – part of the money that UNOC is requesting for.
Aside from the money that the company needs to invest in the sector on behalf of government, it will also needs more for the day-to-day operations to the tune of 80 billion shillings annually. Nabbanja said this is being provided through budget appropriations.
Nabbanja was speaking at the signing of the Memorandum of Understanding with Stanbic bank where they will work with UNOC to develop capacities of small and medium businesses to be ready for the sector.
Stanbic bank chief executive Patrick Mweheire said much as UNOC and government needs money for capitalization, investors were willing to fund the projects because their return is in double digits when oil starts flowing.
One option to get this money is that government will borrow. There is hope that the moment government reaches the Final Investment decision with oil companies, a lot of entities will be willing to bring this money.
Government had some money in the Petroleum fund but was withdrawn to fund the budget. Official estimates show that once the oil starts to flow, Uganda could earn up to $3bn annually for at least 20 years.
On the training of SMEs, Nabbanja said the local businesses weaknesses to do with submitting competitive bids, health and safety standards, and lack of the will to pull resources together due to lack of trust.
UNOC will provide the expertise while Stanbic will provide the financial resources for the trainings through its business incubator programme.
Stanbic has been running the training and according to Mweheire, at least 1,500 businesses have been trained in the last two years.
They come from different areas, including logistics, agriculture, health sector, and hospitality. The target is to reach at least 5,000 local small businesses.
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