Profitable Investment Opportunities in Uganda
By Hon Evelyn Anite, Minister of State for Investment and Privatization
Uganda enjoys a unique location along the equator, in the heart of Sub-Saharan Africa within the East African region.
Its landscape encompasses the snowcapped Rwenzori Mountains, Lake Victoria – the largest fresh water body in the world, the western escarpments of the Great Rift Valley and it is home to the source of the Nile, which is the only river in the world that flows north.
Uganda also has unique Flora and Fauna, a modified equatorial climate with warm temperatures all year round. Uganda is bordered by South Sudan in the north, Kenya in the east, the United Republic of Tanzania in the south, Rwanda in the southwest and the Democratic Republic of Congo in the west. This land linked position, gives Uganda a strategic commanding base for regional trade and investment. The people in Uganda are the most friendly and the most highly entrepreneurial community you are set to come across within the next decade. The economy also offers high returns on investment thus making Uganda your preferred investment destination.
BUS RAPID TRANSIT PROJECT
The Ministry of Works and Transport seeks a partner to develop the ‘Pilot’ Bus Rapid Transit project (BRT) project forming part of the overall planned integrated BRT network for Kampala city, which in turn will be part of the wider integrated land use and transport planning for the Greater Kampala Metropolitan Area (GKMA). The Pilot BRT will cover a total 25km on three major routes exiting the city. The project involves construction of Bus lanes with a median and exclusive rights to the BRT Buses. The mixed traffic will utilize the outer lanes of the carriage way. All roundabouts along the BRT routes will be replaced by traffic signaling. A total of 26 stations will be built with an average carriage way width of 23m to 26m.The project cost is $ 424.4 Million (Four Hundred Twenty-Four Million Four Hundred Thousand dollars)
GREATER KAMPALA LIGHT RAIL MASS TRANSIT (GK LRT) SYSTEM
The Ministry of Works and Transport seeks a partner to develop and provide affordable, reliable, convenient, environmentally friendly and safe public mass transport, especially for the low-income population of the Greater Kampala Metropolitan Area (GKMA). The Greater Kampala Light Rail Mass Transit (GK LRT) system plan developed by the Government of Uganda is proposed to move along the major transport corridors of the Greater Kampala Metropolitan Area (GKMA) in line with the Greater Kampala Multi-modal Transport Master Plan. The GMKA comprises the districts of Kampala, Wakiso, Mpigi and Mukono. It is envisaged that the GK LRT will reduce congestion, improve safety, reduce greenhouse gas emissions and improve air quality. The plan is to develop a total of 240km of GK LRT system in a phased manner starting with 45km in the phase one. In order to ensure integration of the main SGR project, the GK LRT and other transport infrastructure and systems, the Ministry of Works and Transport has reserved the Kampala Railway Station to be designed and developed as a multimodal transport hub. Pre-feasibility studies have been conducted and the project has been earmarked by the Ministry of Finance, Planning and Economic Development to be implemented through the Public Private Partnership (PPP) framework.Investment Cost: $1.044 Billion (One Billion Forty Four Million Dollars) Phase 1, 45Km
PHOSPHATE ROCK PROJECT
Bukusu is located in Manafwa District, Eastern Uganda. Deposit Quality and Quantity: The bulk of the deposit at Bukusu consists of soft apatite-bearing soil, varying from 13% P2O5 with a resource of 50 Million Metric Tonnes. Demand is driven by the construction, infrastructure sectors which contribute 12% and 11% respectively to GDP with a growth rate of 8.1%and 7.1%. Prospects point to East Africa where the population is expected to double by 2050. Exploration Activities: Potential for additional exploration activities basing on the substantial volumes of indicative reserves. Exploration possible in areas other than Busumbu mine and Tororo where the Sukulu phosphate project occurs.There is need for Establishment of Phosphate Beneficiation Plant requiring an investment of USD 50m (Fifty Million Dollars)
MUKO IRON AND STEEL PROJECT
Muko hosts hematite deposits of iron ore with 150 million tones. This haematite Iron Ore, show characteristics of high-quality iron ore (55-68% Fe). Surficial investigations, display thin beds of mineralization ranging from 5 to +/-100m. Demand Drivers.A minimum of 800,000t/y of iron ore mining is required to satisfy the Ugandan Market, while 4 million t/year is required in the East African Region (Uganda, Kenya, Tanzania). Construction and infrastructure contribute 12% and 11% respectively to GDP with a growth rate of 8.1%and 7.1%. The two sectors are biggest consumers of iron and steel. Heavy profiles and structural steel products are almost absent in Uganda due to unavailability of special steel products (High Alloy) that require dedicated production plants. Uganda has several steel players of varying production capacities and operating at different stages of the downstream Iron and Steel (I&S) value chain, Key players in Uganda are steel processors using semi-finished steel sourced from abroad. Existing opportunity to produce 0.5Mt/y of iron ingots/briquettes/sponge from its iron ore resource to feed into the existing steel industry. Uganda’s iron ore, targets the East African Community countries with Uganda’s intra trade at 40% and expected to grow due to Africa Free Continental Trade Area and existing common markets. Investment Cost: Initially USD 500 Million (Five hundred million dollars)
BAHATI WOLFRAM PROJECT
The Ministry of Energy and Mineral Development seeks an investor to explore, evaluate and develop the wolfram in South Western Uganda. Bahati Wolfram Resource (BWR) is a major deposit with a history of underground mining. Due to lack of detailed exploration involving drilling, the reserve estimates for BWR are not clearly documented. Investment Amount is Initially $2 Million (Two Million Dollars)
KIRWA WOLFRAM PROJECT
The Ministry of Energy and Mineral Development seeks an investor to explore, evaluate and develop the Wolfram resource in South Western Uganda (Kisoro District). Kirwa Wolfram Resource is a major deposit with a history of underground mining. Due to lack of detailed exploration involving drilling, the reserve estimates for Kirwa Wolfram Resource are not clearly documented. Located in Busanza Sub-County, Kisoro District/ Investment cost is $2 Million (Two Million Dollars)
SHEET GLASS PROJECT
Uganda Development Corporation seeks a partner to set up a sheet glass plant in the country to add value to the pure silica sand. This is expected to result in import substitution, employment creation and increase in foreign exchange earnings. Pure white silica sand is readily available at Dimu Beach on the shores of Lake Victoria in Kalisizo District. This resource has not been fully exploited by the country and has resulted in big imports of sheet glass and other glass imported products. The foreign exchange outflows resulting from imports of glass and related products are very high, hence making local production a viable option. Investment cost is $23,007,154.68 (Twenty-three Million Seven Thousand dollars)
ESTABLISHMENT OF AN INSTANT SOLUBLE COFFEE PLANT
The Ministry of Agriculture, Animal Industry and Fisheries seeks an investor to set up a soluble coffee plant. Uganda does not have a soluble coffee plant despite its stable political and investment environment. The country produces Robusta and Arabica coffee throughout the year. Prevailing export prices offer a sufficient margin to a soluble coffee plant to cover major costs. For instance, the average export price of Robusta screen 12(lower quality) is 1.87 per kilo compared to a retail price of $15.00 per kilo soluble in UK. The project is about setting up a state-of-the-art soluble coffee plant to manufacture 4,000 tonnes of freeze dried and 1,000 tonnes of spray dried instant coffee per year. Critical risk factors and their mitigation as well as availability of engineering technology were identified as key success factors. Investment cost is $57,330,000 (Fifty Seven Million Three Hundred Thirty Thousand dollars)
ESTABLISHMENT OF A MODERN CATTLE ABATTOIR
The Ministry of Agriculture, Animal Industry and Fisheries seeks for an investor to set up the abattoir around Lyantonde or Nakaseke where government can acquire land. Under the current livestock production systems, the most feasible commercial export-oriented slaughter facilities are small to medium scale abattoirs with an output of no more than 200 cattle per day. These sizes require less initial capital outlay, is easy to manage and avoids redundant capacity. Processing capacity can be upgraded to cater for market growth and demands. The beef sector is growing exponentially with significant demand in the East African Region. Investment cost is $48,480,000 (Forty Eight Million Four Hundred Eighty Thousand dollars)
COTTON AND TEXTILE PROCESSING
The Ministry of Agriculture, Animal Industry and Fisheries seeks an investor to set up a cotton and textile processing factory. The project will address the production, value addition, marketing and quality control constraints in the cotton sub-sector. The national average yields of cotton seed have increased from 625 kg/ha in 1994 to 1250 kg/ha in 2010, while yields of 3,750 kg/ha have been achieved on the rich volcanic foothills of Mt. Rwenzori. Cotton is one of Uganda’s priority sectors and all cotton seed is handpicked, which better preserves the intrinsic quality of the lint. There is huge potential to increase the country’s production since 2/3 of arable land is suitable for cotton cultivation. Investment cost is $27,036,100 (Twenty Seven Million Thirty Six Thousand One Hundred Dollars)
LUWEERO FRUIT FACTORY
The Government of Uganda (GoU) through its investment arm, UDC, intends to invest in a fruit processing facility and seeks a partner to provide the much-needed uptake of farmers’ products, provide access to the market and reduce post-harvest losses. Investment cost is $3,780,630 (Three Million Seven Hundred Eighty Thousand dollars)
NYOWA FRUIT FACTORY
Uganda Development Corporation seeks a partner to set up the project to promote value addition along the various agro- industry value chains in Uganda with specific focus on increasing competitiveness of the country’s fruit value chain. The proposed investment partnership model envisages a tripartite investment share agreement. Investment cost is $3,783,784 (Three Million Seven Hundred Eighty Three Thousand dollars).
ETHANOL FACTORY
Liz Otema seeks a partner to establish an ethanol factory in Gulu with an installed capacity of 780, 000 litres of ethanol, and 624,000 kilogrammes of carbon dioxide, 54,600 litres of acetaldehyde. The project involves construction of the factory, office, warehouse building, and importation and installation of machinery. It also plans to recruit and skill manpower. The project is estimated to cost $820,000 of which $574,000 will be in USD and $246,000 in local currency. The project is in line with government policy of import substitution, increased production, self-reliance, and job creation. Investment cost is $820,000 (Eight Hundred Twenty Thousand dollars)
REHABILITATING AND FUNCTIONALISING MBALE DAIRY FACTORY
The project involves rehabilitating the defunct dairy factory premises, procuring dairy processing and value addition equipment and managing the factory on a Private – Public Partnership. The factory will also absorb and process high fat raw milk from the rich Northern Eastern milkshed of the country. The factory is located close to the main border points of Busia and Malaba for easy access to the regional and international export markets. Reviving the Mbale dairy factory will boost the country’s GDP and dairy export earnings while creating employment of the local population in line with the National Development Plan III and the Agro – Industrialization Programme. This project has been approved by the Programme Working Group and is awaiting financing from the government and private sector. Investment cost is $980,000 (Nine Hundred Eighty Thousand dollars)
REHABILITATING AND OPERATIONALISING MILK COLLECTION CENTRES IN PRIME LOCATIONS
The project involves rehabilitating, equipping and operationalising six (6) milk collection centres (MCCs) in a Public Private Partnership. The milk collection centres are located in core milk processing areas with a vibrant domestic market and easy access to dairy processing factories. These MCCs can be upgraded to small scale dairy processing cottages to meet the domestic market and supply institutions within the area. The proposed project will boost milk production in the area, reduce post-harvest losses, increase dairy farmer household income and improve household nutrition. It will further strengthen the development of the dairy value chain in the country. This project is provided in the Agro-industrialisation Programme Implementation Action Plan of the NDP III and awaiting financing from the private sector. Investment cost is $684,932 (Six Hundred Eighty Four Thousand Nine Hundred Thirty Two Dollars)
DEVELOPMENT OF OFFICE – COMMERCIAL COMPLEX
The National Enterprise Corporation (NEC), the commercial arm of the Uganda People’s Defence Forces, seeks a partner to set up an office/commercial complex to be located in a prime business suburb of Kampala. NEC Business and Commercial Complex will consist of show rooms on the ground floor, and offices and other social amenities on the upper floors. It is expected to add an architectural value to the surrounding area. NEC targets upscale market. Investment cost is $10 (Ten Million Dollars)
KIREKA SLUM REJUVENATION PROJECT
National Housing and Construction Company Limited is a semi quasi-Uganda government parastatal with a direct mandate to deliver housing on behalf of the Government of Uganda. It has a projected housing deficit of 200,000 units which is projected to increase with the extension of the metropolitan area to neighbouring towns of Wakiso and Mukono. In order to address the housing shortage and take advantage of immediate opportunities, National Housing has earmarked two housing developments – the Kireka slum rejuvenation project and the Bukerere housing projects and seeks financial partners, to develop the projects. National Housing and Construction Company Limited (NHCC) owns 292 acres of freehold land, located in Kireka in the Kira Municipality within Wakiso district. NHCC plans to develop approximately 12,000 housing Units in five phases. The first phase of the project will entail development of social housing of 1,2 and 3 persons. The preceding phases will entail the development of commercial residential low cost, mid income and high-end housing that include apartment blocks, town houses and villas alongside the supporting utilities of roads, power, sewerage treatment and Telecom services for the high-end segment, commercial retail and green parks. At the forefront of the concept is the adoption of sustainable approach to the design and implementation of the project. Investment cost is $158,400,000 (One Hundred Fifty Eight Million Four Hundred Thousand Dollars)
EQUATOR DEVELOPMENT PROJECT
Uganda Tourism Board seeks a partner to invest in tourism infrastructure along the equator points, including Kayabwe (Masaka Road), Nfo Island and Kikorongo that are currently, engaged in tourism. The identified opportunities include marine tourism opportunities, cultural tourism, wildlife, and enhanced monument development, among others. Although the Equator traverses 13 countries globally, only a few of these have positioned themselves to reap from this unique endowment. In Uganda, the Equator cuts across 12 districts on both water and land. Sixteen points are easily recognizable in the country. Investment cost is $5.2 Million (Five Million Two Hundred Thousand dollars).
MGAHINGA INSTITUTE OF TOURISM AND HOSPITALITY DEVELOPMENT
Mgahinga Institute of Tourism And Hospitality Development (MITHD) seeks a partner to develop a training institute to offer training to the youth on how to tap opportunities in the tourism industry. A recent survey in Uganda, Rwanda and DR Congo showed that inadequate skills significantly hamper local community participation in tourism within the greater Virunga region. Uganda alone has more than 400 tour companies, over 4,000 accommodation facilities, over 35,000 restaurants and eating houses as well as other enterprises in the entire value chain. MITHD intends to train students to become pragmatic to initiate their own enterprises and be able to fit in the labour market and make impactful contribution. The market for the graduates exists in tour and travel companies, accommodation establishments, transport industry and tourist attraction sites among others. In order to generate effective results, the proposed training institute will train learners to become specialists in certain areas like food production, pastry and bakery, food and beverage services, housekeeping, events management, tour guiding and driving, hotel operations and marketing. Investment cost is $3,702,315.05 (Three million, Seven hundred and Two Thousand Three Hundred and Fifteen dollars.
GEOTHERMAL EXPLORATION AND DEVELOPMENT AT BURANGA PROSPECT
GIDS Consult Limited seeks a partner to develop at least 100 MW Geothermal Power Plant at Buranga prospect. The company is planning to drill three deep exploration/production wells at the prospect and develop 30MW well-head geothermal power plant units at each successful wells. The company shall develop a 100MW geothermal power plant. Initially the company intends to undertake a geothermal exploration and development project at Buranga, Sempaya, in Bundibugyo District, Western Uganda. The pre-feasibility studies done at Buranga indicate a huge potential area for geothermal exploration and development. The subsurface temperatures are approximately 150 – 200˚C. These temperatures are suitable for electricity production and direct use in industry and agriculture. Investment cost is $42 Million (Forty Two Million Dollars).
KYENJOGYERA MINI HYDRO POWER GENERATION PROJECT
Tegemea Holdings Uganda Ltd seeks a partner to set up an energy resource facility – the Kyenjogyera Mini Hydro Power Project (MHP) in Kakamba Village, Bisya Sub-county, Buhweju District in Western Uganda. The Kyenjogyera MHP is a proposed hydropower facility expected to generate 190KW of electricity. The proposed facility is to be located along River Kyenjogyera in Kakamba Village. All the civil engineering structures will be located within areas (Kyenjogyera and Kakamba) in Bisya Sub-county. The proposed weir (00°16’43.03”S, 30°28’58.59”E) and the headrace channel are to be located in the same village while the fore bay tank, penstock and powerhouse are also to be located within Kakamba village. The energy generated from the facility will be used for a water industrial plant, hospitals, agro processing enterprises, metal wielding and fabrication workshops, and unlock the business potential in the surrounding areas as shall be agreed between the firm and the legal authority (Uganda Electricity Transmission Company Limited (UETCL) based on a power purchase agreement. Investment cost is $5,500,400 (Five Million Five Hundred Thousand Four Hundred Dollars).
MICROPAY (U) LTD
MicroPay (U) Ltd seeks a partner to set up an e-payment platform independent of any telecommunications network where clients may send / receive money and carry out financial transactions such as buying airtime across all telecoms, or pay utility bills like power, water and pay TV using an application installed on their smart phone, or unstructured supplementary service data (USD) code for non- smart phone users. MicroPay recently secured the Bank of Uganda licence to operate both as a payment systems operator (small funds transfer) and payment service provider (small electronic money issuer). MicroPay seeks funding on equity participation. Investment cost is $4 Million (Four Million Dollars).
DEVELOPMENT OF AN INDUSTRIAL AND BUSINESS PARK
National Enterprises Corporation (NEC) seeks a partner to set up and develop an industrial and business park on 1sqm of land at Kakooge in Nakasongola District. The aim of the project is to tap into benefits of clustering industries in one location. The industrial and business park named T6 will be under the Ministry of Defence and Veteran Affairs and managed NEC. Resonating with NEC’s key objective of commercial viability and competitiveness through innovation and technology advancement, the park is expected to attract industries with, among others, of ICT capabilities that are of national strategic interest. The park will create a one-stop centre for – related businesses and the requisite trade support and business processing services; and afford them the attendant investment incentives and privileges provided by the Government of Uganda. Investment cost is $20 Million (Twenty Million Dollars).
INFRASTRUCTURE DEVELOPMENT FOR KABALE PETROL – BASED INDUSTRIAL PARK
The Government of Uganda through the Ministry of Energy and Mineral Development acquired land for the establishment of an industrial park of 29,57 sq. km. The park is expected to host the crude oil export hub, the feeder pipelines from the Kingfisher and Tilenga Oil fields, the East African Crude Oil Pipeline, the multiproduct pipeline, the Uganda refinery, Uganda’s 24 International Airport, support and downstream industries, and other support facilities such as waste management, water, power, warehousing, and access roads, among others. Investment cost is $19 Million (for common infrastructure).
CONSTRUCTION OF AN OIL JETTY AND PIPELINE AT JST
Currently, Jinja Storage Terminal is the only operational national strategic reserve terminal with installed storage capacity of 30million litres. This project is expected to purchase 15 million litres of fuels as national strategic reserves for the country, which necessitates facility upgrades such as construction of an oil jetty and pipeline to enable lake transport to deliver stocks. UNOC will then grow the strategic reserves through bulk trading wherein the fuel will be purchased, stored and then traded for eventual replenishment with the new stocks as prolonged holding of the volatile petroleum products in storage tanks affects their desired quality and results in storage losses. Through this approach, security of supply will be enhanced and benefits from economies of scale enjoyed. Investment cost is $18.184 Million (Eighteen Million One Hundred and Eighty Four Thousand Dollars)
KABALE ENERGY PROJECT
Kabale Energy project is in the advanced stage of implementing a “Peat” based power generating Project for 33 MW power station near Kabale town, South West of Uganda. The project is estimated to cost USD 60 – 70 Million all inclusive. The power is to be supplied to the Government utility. Investment Amount Require: US$ 5 million
INITIATIVE FOR EFFICIENT WASTE MANAGEMENT, BIO ENERGY GENERATION, ORGANIC FERTILIZER PRODUCTION AND IRRIGATION FOR UGANDA PRISONS.
The proposed project is aimed at developing a site waste management plan that would facilitate the production of biogas, electricity, organic fertilizer, irrigation water and animal feed for Uganda prisons service using the bio waste accumulated and available to the prisons all over the country.Bio waste sources would include human agricultural and animal waste. We will determine the volumes of biomass available, their water content, calorific value and viability for resource recovery. We will address the specific needs of the prisons, and deploy a cost effective system of technologies to support the prisons while enhancing waste management. Investment Amount Required: US$30,000,000
TRANSMISSION LINES
In order to evacuate power from the generation plants and facilitate power trade between Uganda and neighbouring countries, Government has planned to undertake construction of several transmission lines and associated substations that include among others;
- 400KV Masaka – Mbarara project (160 km),
- 400KV Uganda – South Sudan project (380 km),
- 220KV Uganda – Tanzania project (250 km),
- 220KV Uganda – Democratic Republic of Congo project (340 km) and 132kV Lira – Arua transmission line (314 km).
WHY UGANDA IS THE BEST INVESTMENT DESTINATION
- Access one of the fastest growing regions in the world. Uganda and the East African region are growing steadily in both population and GDP.
- Uganda is open and secure for foreign investment. Uganda is the most open country in the region for Foreign Direct Investment (FDI).
- Uganda has a strong natural resource base.Uganda has several unexploited mineral deposits & tourism opportunities.
- Highly Competitive labor Costs.Uganda offers the lowest cost workforce in the region and labor costs are forecast to grow more slowly than other EAC country.
- GDP GROWTH: East Africa is one of the world’s fastest growing regions with an economy approaching USD $1 Trillion. Uganda has achieved an average GDP growth of 6.3% per annum for the last 30 years. Uganda’s GDP is forecast to grow by 6% p.a. from 2019-2023 (IMF, 2018).
- POPULATION GROWTH: By 2023, the population of the EAC is forecast to reach 200 million and GDP (in PPP) to reach US$ 0.75 trillion. (Source: IMF, 2018).
- EXPORTS TO SUB-SAHARA: Uganda has the highest percentage of exports going Sub-Saharan Africa ( World Bank, 2017)
- MOST OPEN COUNTRY TO FDI;All sectors of the economy are fully liberalised for investment. 100% foreign ownership of investment is permitted.
- PRO-BUSINESS REGULATIONS; Uganda ranks highly across many key business climate indicators for inward investors.
- HEALTHIEST GOVERNMENT BUDGET BALANCE; Uganda’s comparatively strong public finances help to create a lower risk and more stable business environment for foreign investors.
- LOWEST LABOUR COSTS IN THE REGION:Benefit from the lowest cost workforce in the region.The average yearly wage in Uganda for an unskilled production operative was $440 in 2017 (excluding social security costs). (fDi Benchmark & Financial Times)
- LABOUR COSTS FORECAST TO GROW MORE SLOWLY:Labour costs in Uganda are also forecast to grow more slowly than other countries in East Africa, reflecting Uganda’s faster growing labour force and skills availability (FDI Benchmark).
- SKILLED WORK FORCE:Benefit from a large and growing workforce. Uganda is very highly rated for recruitment potential, workforce trainability and women and youth engagement in the labour force. (Global Competitiveness Report, 2017/18 and WEF, 2017)
- FERTILE SOIL & FAVOURABLE CLIMATE;Uganda is richly endowed with rainfall, soils & favourable temperature ranges with a number of crops grown organically.
- UNTAPPED TOURISM OPPORTUNITIES: Uganda has been dubbed the Pearl of Africa’ due to its strong tourism potential with lots of forests, lakes and rivers.
- UNEXPLOITED MINERAL DEPOSITS:Uganda has confirmed deposits in Iron Ore, Phosphate, Gold, Wolfram, Petroleum, Diamond, Vermiculite, Silica, Limestone, etc.
- LOWEST REGIONAL COST OF LIVING FOR EXPATS:Kampala offers the lowest cost of living for international employees in the East African region.
- 6TH BEST COUNTRY IN THE WORLD FOR MAKING FRIENDS ABROAD;Ranking among the top 10 countries for the fourth consecutive year, Uganda has always been an excellent destination for expats looking to find friends easily
- MOST LIVEABLE CITY IN EAST AFRICA; Kampala has continually topped the Mercer Quality of Living City Ranking in the East Africa.
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