Uganda and Tanzania have formalized a new energy partnership with Vitol Bahrain EC, laying the groundwork for a regional hub at Tanzania’s Port of Tanga that could attract over $20 billion in investments. This ambitious plan aims to reshape East Africa’s petroleum industry, concentrating refining, storage, logistics, trading, and distribution in one location. The memorandum of understanding, signed in Dar es Salaam last Thursday, establishes an integrated energy corridor linking the two nations.
The agreement involves multi-product fuel pipelines, oil and gas infrastructure, storage terminals, and a proposed refinery. Presidents Yoweri Museveni and Samia Suluhu Hassan witnessed the signing, marking a significant expansion of energy cooperation. This follows the $5 billion East African Crude Oil Pipeline (EACOP), which is nearing completion and connects Uganda’s oilfields to Tanzania’s Indian Ocean coast.
Capital's New Frontier
At the core of this initiative is the transformation of Tanga into one of Sub-Saharan Africa’s largest integrated energy hubs. The proposed refinery will process crude from both regional sources and international markets, creating another major refining center for East Africa. Uganda is on the verge of becoming an oil-producing country, with production at its Kingfisher development expected to begin in a few weeks’ time. Tanzania Petroleum Development Corporation Managing Director Mussa Makame noted the proposed Tanga refinery would complement Uganda’s planned 60,000-barrel-per-day Hoima refinery, with both linked by a bi-directional pipeline for refined products.
This infrastructure package also includes a refined petroleum products pipeline between Uganda and Tanzania, alongside expanded storage and distribution facilities. A proposed natural gas pipeline connecting the two countries is also part of the deal. Tanzania’s Energy Minister, Deo Ndejembi, stated the Tanga Regional Energy Hub has the potential to attract investments exceeding $20 billion. He emphasized its role in strengthening East Africa’s energy security and export capacity, signaling a clear focus on capital accumulation and surplus extraction from regional resources.
The State's Hand in Accumulation
Uganda’s Energy Minister, Dr Monica Musenero, presented the agreement as a significant step in regional integration. She framed it as a commitment by both governments to use energy infrastructure to drive industrialization, trade, and job creation. Rather than simply exporting crude oil, Uganda aims to maximize value through downstream industries. Dr Musenero claimed these industries would create skilled employment and support manufacturing and technology development. She asserted, “These are not merely infrastructure projects. They are strategic investments that will create jobs for our young people, deepen regional trade and strengthen the logistics systems that support our economies.”
Such pronouncements from state officials serve to legitimize massive capital outlays by promising broad societal benefits. The state apparatus actively facilitates these projects. The proposed bidirectional pipeline, Ndejembi explained, will allow refined products to move in either direction based on demand, opening wider regional markets and reinforcing supply security. Feasibility and front-end engineering design studies for the refined products pipeline and storage terminal are expected to be completed later this year, with natural gas pipeline studies by October.
Promises of 'Development'
Beyond petroleum, Uganda has secured $250 million from the World Bank to finance its section of the planned Uganda-Tanzania 400kV electricity interconnector. This project aims to strengthen regional power trade through the Eastern Africa Power Pool and improve electricity exchanges with Southern Africa. Dr Musenero described the Hoima refinery and the proposed Tanga hub as complementary projects designed to improve regional energy security and enable East Africa to capture greater value from its petroleum resources. The experience gained from the EACOP project, officials noted, has already strengthened investor confidence, ensuring continued capital flow into the region.
Officials initially avoided suggestions of regional rivalry, despite Nigerian tycoon Aliko Dangote’s initial proposal for his refinery at Tanga, which later shifted to Lamu in Kenya. This change followed a public rebuke by Tanzanian President Samia to Kenyan counterpart William Ruto. The competition among states to attract foreign capital, even with public disagreements, underscores the underlying drive for investment. Both sites, officials now say, have important roles in improving energy security for the continent, a narrative that often masks the primary objective of profit generation for transnational corporations.