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The government has signed a €70m ($76m) agreement with Germany’s KfW and the Agence Française de Développement to develop the Muzizi hydro project at the southern end of Lake Albert. The financing comes from the Mutual Reliance Initiative, a joint cooperation framework established by KfW, the AFD and the European Investment Bank. The AFD is providing €45m, while the government is providing €21m and KfW €4m. The project consists of two interconnected dams, Muzizi A (26MW) and Muzizi B (18.7MW), plus a new substation, feeding into a new 132kV transmission line from Hoima to the Mputa area continuing to Fort Portal and on to Nkenda sub-station in Kasese.

Berkeley Energy, manager of the $200m Africa Renewable Energy Fund (Aref), has issued procurement notices for the electromechanical and civil works contracts for the 5MW-10MW Achwa III hydroelectric power project. Aref is 99% owner of Achwa, a cascade run-of-river project on the Achwa River, 50km north-east of Gulu in northern Uganda. The project includes a 12km, 33kV transmission line and around 10km of access road. The electromechanical and civil works contracts include design, manufacture, supply, transportation, installation and commissioning of turbines, associated works and spare parts.

The Ministry of Energy and Minerals has received 17 valid applications to prequalify for its licensing round for six blocks in the Albertine Graben. A 1 July statement said the bids would be evaluated and qualified companies would be announced on 10 August. The government will issue bid documents and the model production-sharing agreement to qualified applicants on 20 August. The applicants will then be invited to lodge their bids following a mandatory visit to the data room at the Directorate of Petroleum in Entebbe.

Tullow Oil has settled a capital gains tax (CGT) dispute with the Ugandan government relating to its farm-down to CNOOC and Total in 2012. The company said on 22 June that it had agreed to pay $250m, substantially less than the $473m originally demanded by the Uganda Revenue Authority (URA). Tullow paid $142m in 2012, the minimum amount required to launch an appeal against the assessment, leaving $108m outstanding. A first instalment of $36m was paid on settlement, with two more payments to be made in 2016 and 2017.

Negotiations on projects agreements for a planned refinery at Hoima are ongoing, though they are taking a little longer than the two months originally estimated. “These things take time,” acting director of Uganda’s Petroleum Exploration and Production Department, Ernest Rubondo, told African Energy. “It’s a $4bn project, it’s normal that it takes some time to work out.” A consortium led by Russia’s RT Global Resources was selected as preferred bidder in February, and talks began in Kampala in March.

The Rural Electrification Agency is seeking expressions of interest from consultants for a Grid Rural Electrification Project in western, northern, central and eastern Uganda, funded by the Islamic Development Bank. The consultant will provide project management and construction supervision for the installation of some 1,106km of medium-voltage overhead lines, 678km of low-voltage networks, 673 distribution transformers and 9,772 last-mile consumer connections. Firms must express interest by 22 July. Contact: Head, Procurement & Disposal Unit, Rural Electrification Agency, Plot 10, Windsor Loop, PO Box 7317, Kampala, Uganda. Tel: +256-312-318 100. Email: [email protected]. Web: www.rea.or.ug

Parliament has given the government the go-ahead to borrow $1.4bn from the Export-Import Bank of China to fund the 600MW Karuma hydropower project on the Victoria Nile. The approval will allow construction to continue. Commissioning is expected in four years’ time. The loan will cover 85% of the $1.6bn cost of the project, with the remaining $253.26m being met by the government. Approval of the loan, which was granted on 25 March, followed heated debates in parliament over whether the deal offered value for money.

Twelve hydropower projects with a combined installed capacity of 90MW have passed the initial due diligence in Uganda’s third and last request for proposals (RfP) under the pilot Global Energy Transfer Feed-in Tariffs (GET FiT) programme. Final investment decisions will be made in June based on the results of detailed appraisal by the implementation consultant Multiconsult Norplan and on remaining available financing, according to GET FiT’s 2014 annual report published in late February. The government of Uganda, represented by German development bank KfW, received applications for 18 hydropower projects in the third RfP, which was launched last November and closed in January this year with the aim of supporting a further 60MW-80MW of renewable energy capacity.

Negotiations got under way in Kampala this week on project agreements for Uganda’s planned refinery. A consortium led by Russia’s RT Global Resources was selected in February as preferred bidder and will work with Japan’s Mitsui in addition to the consortium partners under a joint development agreement.The consortium comprises Russia’s Telconet Capital Limited Partnership, financial services company VTB Capital, oil company Tatneft and South Korea’s GS Engineering & Construction Corporation. RT Global oil and gas director Aleksey Polyakov told the East African Petroleum Conference in Kigali on 5 March that Mitsui was not part of the consortium but would work alongside it.

Sinohydro has given Alstom a contract worth about €58m ($77m) to provide electro-mechanical equipment and technical services for the 600MW Karuma hydropower project on the Victoria Nile. The French engineering giant said on 27 February that Alstom Hydro China would supply, install, test and commission six 100MW Francis turbine-generator sets and related equipment, and provide site services. The run-of-river project, which is to be located in the districts of Kiryadongo and Oyam, 15km downstream of the Karuma Falls in northern Uganda, is being developed by Sinohydro under an engineering, procurement and construction contract signed in June 2013.

The amount of oil that can be recovered from fields in western Uganda has emerged as a key issue in negotiations on production licences between the government, Tullow Oil and Total. Minister of energy and mineral development Irene Muloni told the East African Petroleum Conference in Kigali on 4 March that, of 6.5bn barrels of oil in place, the companies were proposing to recover only 1.4bn. Ministry permanent secretary Fred Kabagambe-Kaliisa told reporters the government was looking for a recovery factor of at least 25%. He said he hoped the talks would be concluded within three months.

The United Nations Commission on International Trade Law Tribunal has ruled in Uganda’s favour in its dispute with Heritage Oil over a capital gains tax (CGT) bill. Heritage must also pay $4m in legal fees. The Uganda Revenue Authority (URA) issued Heritage with a $404m tax bill for the sale of its Lake Albert assets to Tullow Oil in January 2010. The company contested its liability for the payment, but lost its challenge at the Tax Appeals Tribunal in November 2011, then decided to appeal at the tribunal.

InfraCo Africa has issued a request for prequalification seeking expressions of interest from consortia of engineering, procurement and construction (EPC) contractors and original equipment manufacturers (OEMs) for the detailed design, engineering, procurement and construction of a power plant at Lake Albert. The project involves the development, finance, construction and operation of a dual-fuel power plant to run on associated gas and heavy fuel oil produced by the Uganda oil industry. Lake Albert Infrastructure Services Limited (LAIS), a Ugandan company established and owned by InfraCo.

The Ugandan government has selected a consortium led by Russia’s RT Global Resources as preferred bidder for construction of a planned refinery at Hoima to process oil from the Lake Albert region. A consortium led by South Korea’s SK Engineering and Construction, the only other group to reach the final stages of the tender, was selected as alternative preferred bidder. A Ministry of Energy and Mineral Development statement said negotiations with the winning consortium would begin in March and were scheduled to last 60 days.

Uganda has launched its first licensing round, offering six blocks in the Albertine Graben totalling 2,938km2. The blocks cover areas relinquished by Tullow, Total and CNOOC, and have seismic and well data, and in some cases smaller oil and gas discoveries. Energy and mineral development minister Irene Muloni told African Energy in November a key priority for the government in the bid round would be to encourage service providers to increase efficiency and push down costs, so as to minimise their cost recovery and maximise the state’s share.