Oil spurs new business in Hoima
With Uganda’s oil industry steadily progressing towards the development and production stages, companies are setting up shop in Hoima district hoping to get a slice of the tens of trillions of shillings that will be sunk into the oil-rich district in the next few years.
Several Kampala-based firms have opened branches in the area, but start-ups by local businessmen are also cropping up, targeting opportunities in the oil and gas industry.
The Hoima Municipality Physical Planner, Godfrey Muhumuza, told Oil in Uganda that several investors had approached the Municipality seeking to establish warehouses and other industries that will use bi-products from the oil refinery as raw materials.
Consequently, authorities have created a special industrial zone in Bujumbura division to accommodate new investments.
Robert Mugisa has been doing business in South Sudan but was forced to start venturing elsewhere when the war resumed there.
With his savings of 50 million shillings ($20,000), he set up a small-scale foam factory in Kiryateete, a suburb of Hoima town, where he now produces mattresses, cushions and pillows.
He not only hopes to service the ever-expanding market brought by the hundreds of thousands of people flocking into the area seeking employment and other opportunities, but also the raw materials that will be produced by the planned refinery in the district.
“My target is to use bi-products from the oil refinery as raw materials in this industry. I currently import the raw materials from Mombasa in Kenya,” he says.
Motor Care Services Ltd, a subsidiary of Motor Care Uganda Ltd, has opened up a service centre in Buhiga village, Bujumbura division in Hoima municipality.
The 1.5 million dollar facility opened in March 2014 and is offering repair, servicing and maintenance from light vehicles to commercial and heavy duty trucks.
“We are offering after-sale vehicle services to oil companies, contractors of oil firms and other members of the public,” explained Pascal Bwire, the branch manager.
Bwire said their clients include Total E&P, and service providers like Supreme (catering) and Saracen (security).
Another workshop, VEQ-Hoima Ltd, part of the General Machinery Group of Companies (GMACH), opened in November last year along the Hoima-Kampala highway.
It offers service and maintenance of vehicles, specifically Renault trucks, graders, generators and pumps for both oil field service providers and the public. The company also supplies tyres.
“We are maintaining several vehicles belonging to GMACH which we have rented out to companies and organizations in this region,” revealed Godfrey Muleke, the depot manager.
New energy plants
Petroleum developments have also spurred electricity generation projects in the region.
The Kabalega hydro power dam along River Wambabya in Hoima district was completed in December 2012 and can generate up to 9 megawatts of power. It cost about 100 billion shillings ($ 40 million).
Hoima district authorities have also approved a proposal from Albatros Energy to construct another 50 megawatt power plant in the district.
According to the acting Commissioner for Energy Resources in the Ministry of Energy and Mineral Development, James Banaabe Isingoma, the company was awarded a 20 year license for the project.
“The results of the feasibility studies showed that the project is viable,” he said.
The plant will use crude oil, light fuel, diesel or natural gas for power generation, ultimately targeting an output of 230 megawatts, directly employing 200 people.
Meanwhile, Enviroserv, a South African firm among the four companies that have been approved by the National Environment Management Authority(NEMA) to set up oil waste management facilities in the region, is constructing a facility in Nyamasoga village in Buseruka subcounty, along the new Hoima-Kaiso-Tonya road.
According to the company’s Operations Director, Rhyno Gouws, the plant will treat and manage both solid and liquid wastes.
Hoima municipality is already a beneficiary of a 150 million-dollar World Bank project for infrastructural development, alongside 13 other municipalities in the country.
The six-year project, dubbed Uganda Support to Municipal Infrastructure Development Program (USMID), is co-funded by the Uganda government which contributes 10 million dollars from its Local Development Grant.
The project will be delivered under a special instrument known as the Program-for-Results, a new financing instrument for the Bank’s client countries that links the disbursement of funds directly to the delivery of defined results.
The district has also seen several roads upgraded and may soon get its own airport as its municipality slowly transitions to a city.
Report by special correspondent