Thursday, June 13, 2024

AFC boosts Uganda’s petroleum logistics

Indepth

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Africa Finance Corporation (AFC), the leading infrastructure solutions provider on the continent, today announced its investment in Mahathi Infra Uganda Limited, one of East Africa’s largest oil and gas downstream players.

AFC’s US$95.25 million investment will finance the construction of two self-propelled barges for operation on Lake Victoria, providing a more efficient and less carbon intensive alternative to traditional trucking.

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, thereby transforming petroleum product transportation in Uganda and significantly reducing cost, transport time, and carbon emissions.

Uganda is a net importer of petroleum products, primarily through the Mombasa Port in Kenya. As such, the project will have a significant impact on the country’s economy with a single barge trip on Lake Victoria replacing 200 trucks on the road.

Annually, AFC’s investment will eliminate approximately 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, reducing delivery time from seven days to immediate access.

The self-propelled barges are designed in accordance with international Environmental & 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.

Mr. Samaila Zubairu, President & CEO of the Africa Finance Corporation said: “This is a significant milestone in our 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.”

Upon completion, Mahathi’s workforce is estimated to increase from 22 to 100 employees, 30% of whom will be women. The project’s impact extends beyond Uganda, serving as a foundation for future expansions into other landlocked countries near Lake Victoria.

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