INVESTMENT OPPORTUNITIES FOR DIASPORAS SME IN THE ENERGY & MINERALS SECTOR IN UGANDA

1. INVESTMENT OPPORTUNITIES FOR DIASPORAS SME IN THE ENERGY & MINERALS SECTOR IN UGANDA 1st Ugandan UK Convention 27th August 2011 Presentation By Hon Eng Irene Muloni Minister of Energy and Mineral Development, Uganda 27th Aug 2011

2. INTRODUCTION I want to thank Mr. Willy Mutenza for organizing this convention and I am honored to be able to present opportunities in the energy sector to Diaspora investors. In the medium term, the key priorities in the energy and minerals sector are: • to increase electricity generation capacity and development of the transmission network; • to increase access to modern energy services through rural electrification and renewable energy development; • to promote and monitor petroleum exploration and development in order to achieve local production; and • to promote mineral investment through the acquisition of geoscientific data and capacity building.

3. STRATEGIES TO INCREASE POWER GENERATION HYDRO Power Projects Being Developed There are a number of projects being developed inline with the National Development Plan. The majors ones are: • Bujagali Project (under construction) – 250 MW • Karuma Hydropower project - 600 – 700 MW • Isimba Hydropower Project - 100 MW • Ayago Hydropower Project – 600 - 700 MW The status of these projects is as follows:

4. i) Karuma Hydropower Project (700MW): • Government is developing the Karuma project in the medium term as a strong public project. • Energy Infratech Pvt. Ltd of India finalised the detailed feasibility study and preliminary designs, • The tender documents have been finalised and the process for procurement of the EPC Contractor is underway. • This hydropower station will constructed using funds from the Energy Fund as a Public Private Partnership with Government taking the lead. • Construction work is expected to commence early 2012.

5. ii) Isimba Hydropower project: (100MW): • This is located 15km after Kalagala falls on river Nile. • The site has an estimated capacity of at least 140MW. • Fitchner of Germany was contracted to undertake the necessary studies. • The studies will be finalised by Dec 2011. • The project will be developed by the private sector. • Construction work is expected to commence in 2012.

6. iii) Ayago Hydropower Project (600 – 700MW) • With the support of the Japanese Government, a consortium of Japanese power companies, J Power and Nippon Koei are carrying out the pre – feasibility study • Full feasibility study of the Agago project will be undertaked later this year. • Ayago will be developed as a Public Private Partnership.

7. Other Projects under the National Development Plan • Study, design and construct Ariranga hydro power plant to generate 400MW • Build a thermal Power Plant (700MW as part of the refinery) to utilize locally produced heavy fuel oil. • Renewable Energy development • Design and construct solar thermal plants to generate 200MW. • Study, design and build Geothermal power plants to generate 100MW. • Increase the co-generation capacity to 150MW from sugar factories using bagasse, wood, waste crop and garbage. • Develop 150 MW from mini hydros.

8. Transmission Projects: A number of transmission lines have been earmarked to evacuate power from the generation plants. These include: • Nkenda – Mputa – Hoima (132KV, 254km); • Karuma – Kawanda (400KV, 264 km); • Karuma – Olwiyo (132KV, 60km); • Karuma – Lira (132 KV, 80km); • Karuma-Gulu (132KV, 70km); • Isimba interconnection (132KV, 40km); • Kawanda – Masaka (220KV, 142km).

9. Transmission Projects Cont’d: •  Kampala – Entebbe (132KV); • Mirama – Kabale (132 KV); • Hoima - Kafu (132 KV); • Lira – Gulu – Nebbi (132 KV); • Opuyo – Moroto (132KV, 200km); • Tororo – Opuyo – Lira upgrade (132KV, 260km); • Mbarara – Nkenda (132KV, 160km) and • Lira-Kitgum (132KV, 125km).

10. Investment Opportunities Opportunities in Hydropower Development • Participation in the Public Private Partnership (PPP). • Contribution to equity. • Participation in the Engineering, Procurement, and Construction (EPC) Contract. • Supply of Equipment required in the project. Opportunities in Transmission include • Contractors for the EPC • supply of equipment such as transformers, cables

11. STATUS OF OIL AND GAS SECTOR STATUS OF EXPLORATION • Total acreage of about 23,000km2 • 5 active Production Sharing Agreements (PSA) • PSA Operators and partners

12. LICENSING • Due to systematic effort on promotion in the sector, five out of the 11 Exploration Areas (EA) in the Albertine Graben have been licensed to international oil companies. • Over US$1bn invested in seismic data acquisition and processing in addition to the drilling of wells since 1998 by companies currently licensed in the country. • The companies are Tullow Oil, Neptune Petroleum (U) Limited and Dominion Uganda Limited. • The investment levels in this sector will increase with the expected entry of International Oil Majors like Total E & P and China North Offshore Oil Corporation (CNOOC).

13. Oil Refinery in Uganda Government finalized a study for the refinery. • The project is feasible and viable. • The recommendation is to develop a 60,000 BOPD refinery that will later be expanded to 120,000 BOPD and 180,000 BOPD. • Since the 60,000 BOPD Refinery takes 5 years to develop, the strategy is to start with a modular small refinery of 20,000 BOPD delivered within 3 years.

14. Investment Opportunities in the Service Provisions • Clearing and Forwarding; • Flight Charters • Insurance Services; • Civil construction for access roads and drilling pads; • Environmental Consultancy including associated R&D; • Provision of ICT services and facilities; • Provision of Security services to protect the investment and terror threats; • Catering/Camping services

15. Investment Opportunities in the Upstream Oil and Gas Sectors • Joint Ventures and farm-in arrangements in existing licences; • General works and construction, • Logistical services, • Geophysical surveys, particularly seismic surveys, • Construction and Fabrication, • Refining and infrastructure development (e.g. pipelines), • Future petrochemical industry and many others. • Capital for the emerging infrastructure such as refining and transportation of petroleum commodities and products; and • Power generation by Independent Power Producers

16. CONCLUSION • Investment in the Energy, Oils and Gas sectors is priority number one for the Government. • These Sectors are expanding very fast with a legal and institutional framework for carrying out business offering tremendous opportunities.

17. CONCLUSION • The opportunities include:- • Participating in the construction of Hydroelectric Power Plants, construction in transmission lines, construction of small renewable energy projects and in Rural Electrification programmes. • Supply of equipment in the sector. • Participating in the construction of the Petroleum Refinery and the associated infrastructure. • Participation in the exploration of minerals and Petroleum resources. • Sponsoring and financing of projects in the sectors at attractive rates of return. • The above, combined with the accountable leadership, which we have, will ensure sound returns for your investment.