Uganda Vitol $2 Billion Loan To UNOC Redraws Regional Oil Map

Monday 29th December 2025

By inAfrika Newsroom

Uganda Vitol $2 billion loan negotiations have cleared a major hurdle after Parliament endorsed a Shs7 trillion credit line for the Uganda National Oil Company (UNOC). The package, arranged with Swiss-based trader Vitol Bahrain E.C., will finance new storage terminals, a refinery stake and a cross-border pipeline, while also freeing funds for national road projects.

Junior finance minister Henry Musasizi told MPs the facility, priced at SOFR plus one percentage point, will be repaid over seven years. About USD 1.2 billion will go into a new Kampala Storage Terminal in Mpigi District and upgrades at the Jinja Storage Terminal, first built in the 1970s but long under-utilised.

Another portion will support early financing of Uganda’s planned 60,000-barrel-per-day refinery and the proposed Eldoret–Kampala products pipeline, estimated at USD 330 million. The line would connect to Kenya Pipeline Company (KPC) assets, where UNOC plans to acquire a 35 percent stake via KPC’s upcoming initial public offering.

UNOC already runs Uganda’s sole fuel import scheme through Mombasa under a government-to-government deal with Kenya, replacing the open tender system in 2023. Company executives say the exclusive arrangement has delivered roughly USD 150 million in earnings in just over a year, providing the cash flow to back the Uganda Vitol $2 billion loan.

However, critics in Kampala question whether the young state oil firm is taking on too much, too fast, across upstream and downstream projects. Civil society groups also point to past corruption cases involving Vitol in other markets, and want stronger transparency safeguards.

Next steps for Uganda Vitol $2 billion loan

The finance ministry and UNOC must now finalise detailed loan documents, escrow arrangements and security over future cash flows before first disbursement.

At the same time, Kenyan regulators are moving ahead with the KPC share sale, which is expected to raise around KSh 100 billion and anchor the regional pipeline build-out.

Both governments still need to agree on tariff structures, environmental management and how to phase out road tanker transport once the pipeline becomes operational.

Why it matters

The Uganda Vitol $2 billion loan could accelerate East Africa’s shift from fuel trucking to pipeline-based supply, cutting costs and road accidents along the Northern Corridor. It also deepens Uganda’s bet on state-led participation in every stage of its oil chain, from upstream stakes to retail.

For Kenya, UNOC’s entry into KPC would lock in Kampala as a long-term customer, even as Tanzania courts the same market through the Central Corridor. For the region, the deal shows how global traders are still ready to finance large assets if governments can assemble credible revenue streams.