Africa Finance Corp (AFC), the leading infrastructure solutions provider on the African continent, has announced its investment in Mahathi Infra Uganda Limited, one of the largest oil and gas downstream players in East Africa. The AFC’s investment of $95.25 million will be used to construct two self-propelled barges that will operate on Lake Victoria, providing a more efficient and environmentally-friendly alternative to traditional trucking. This investment will revolutionize petroleum transportation in Uganda, slashing costs and carbon emissions.
As a net importer of petroleum products, Uganda primarily relies on the Mombasa Port in Kenya. The project funded by AFC will have a significant impact on the country’s economy, as a single barge trip on Lake Victoria will replace the need for 200 trucks on the road. Annually, this investment will eliminate around 100,000 truck journeys on East Africa’s busiest transport route, which stretches from Kisumu in Kenya to Kampala in Uganda.
Reducing road traffic will not only ease congestion but also minimize issues such as product adulteration, theft, and accidents. Moreover, it will alleviate working capital burdens for small and medium-sized distributors, enabling them to procure products directly from Mahathi’s storage facility. This will reduce delivery time from seven days to immediate access.
The two self-propelled barges are designed to meet international environmental and safety standards. They will effectively prevent fuel leakage and decrease greenhouse gas emissions by over 95%. The reduced emissions are estimated to be equivalent to only 7,692 tonnes of CO2 annually, compared to the previous 172,103 tonnes emitted by 200 trucks. Additionally, the barges will cover a significantly shorter travel distance of about 250km, compared to the 350km road route.
Mr. Samaila Zubairu, President & CEO of the Africa Finance Corporation, expressed his satisfaction with this investment, stating that it is a significant milestone in their mission to address Africa’s infrastructure challenges sustainably. He believes that through this investment, they are contributing to the transformation of petroleum transportation in Uganda, offering a lower-emissions alternative that significantly cuts costs, reduces road congestion, and improves mobility and accessibility. These improvements are expected to lead to sustainable economic growth and productivity.
Upon completion of the project, Mahathi’s workforce is estimated to increase from 22 to 100 employees, with 30% of them being women. This investment will not only benefit Uganda but also serve as a foundation for future expansions into other landlocked countries near Lake Victoria.
Uganda possesses approximately 6.5 billion barrels of proven oil reserves, with around 1.4 billion barrels located on its western border with the Democratic Republic of Congo. The AFC’s investment in transforming petroleum transportation is a step towards maximizing the potential of Uganda’s oil resources.
Established in 2007, the Africa Finance Corporation has become the go-to partner for private sector-led infrastructure investment across Africa. With a focus on financial and technical advisory, project structuring, development, and risk capital, the AFC has successfully invested a total of $11.5 billion across Africa. The corporation plays an essential role in developing high-quality infrastructure assets in sectors such as power, natural resources, heavy industry, transport, and telecommunications.
Africa Finance Corp’s investment in Mahathi Infra Uganda Limited is set to revolutionize petroleum transportation in Uganda by providing a more efficient, cost-effective, and environmentally-friendly alternative. As the demand for petroleum products continues to rise, this investment will have a significant impact on Uganda’s economy, reducing costs, transport time, and carbon emissions. Additionally, it will improve accessibility, alleviate congestion, and promote sustainable economic growth in the region.
