Dar es Salaam. Tanzania and Uganda have signed a memorandum of understanding (MoU) which is expected to attract investments exceeding $20 billion in the energy sector, including a refinery in Tanga region.
The fresh step which is expected to transform Tanga into a regional energy hub, comes a few months after Africa’s richest man Aliko Dangote said he would prefer to build mega oil refinery in Kenya rather than the earlier planned in Tanga, Tanzania.
The signing involved the Tanzania Petroleum Development Corporation (TPDC), the Uganda National Oil Company (UNOC) and Vitol Bahrain which signed the agreement at State House in Dar es Salaam yesterday, during the second day of Ugandan President Yoweri Museveni’s State visit to Tanzania, hosted by President Samia Suluhu Hassan.
Speaking during the signing ceremony, Tanzania’s Minister for Energy Deogratius Ndejembi described the agreement as a historic milestone that extends beyond cooperation between the three institutions.
“Today, we are laying another foundation in the economic architecture of Eastern Africa. We are making another bold statement that African countries can work together not merely as neighbours but as strategic partners capable of planning, financing and delivering transformative projects,” he said.
He said the initiative demonstrates the commitment of the governments of Tanzania and Uganda to deepen regional integration, strengthen economic cooperation and unlock East Africa’s energy potential.
According to Mr Ndejembi, the project is intended to create value beyond crude oil transportation by developing refining, storage, logistics, trading and industrial activities. The initiative is built around four interconnected components: a crude oil refinery, a terminal tank farm for storing and loading refined products, a jetty for receiving shipments, and a pipeline to transport refined oil from Tanga to Uganda.
Under the proposed framework, crude oil originating from Uganda will be shipped to Tanzania for refining. The finished products will then be distributed back to Uganda for domestic consumption, while also catering to the Tanzanian market and other neighbouring countries. This integrated approach, officials say, will not only enhance energy security but also stimulate industrial growth and regional trade.
Tanzania and Uganda are implementing joint crude oil pipeline project which is estimated to have reached 91 percent so far. The East African Crude Oil Pipeline (EACOP) which stretches 1,443 kilometres from Hoima in Uganda to Chongoleani in Tanga, Tanzania, is estimated at $6 billion in value.
“EACOP transports molecules. The Tanga Regional Energy Hub transforms those molecules into prosperity,” Mr Ndejembi said.
He said the vision is supported by Tanga’s strategic advantages, including its location on the Indian Ocean, its role as the export point for the East African Crude Oil Pipeline (EACOP), available land for industrial expansion and its connectivity to regional transport corridors linking East, Central and Southern Africa.
Mr Ndejembi said the project has the potential to attract investments of more than $20 billion, making it one of the largest integrated energy infrastructure investments in Sub-Saharan Africa.
However, he stressed that the project’s significance extends beyond its financial value.
“It will create industries. It will create jobs. It will create skills. It will create exports. It will create technology transfer. It will create new businesses. Most importantly, it will create prosperity for future generations,” he said.
The minister also dismissed suggestions that the proposed Tanga energy hub would compete with Uganda’s planned refinery, saying the two projects are designed to complement each other.
“These projects are not competitors. They complement each other strategically,” he said.
He explained that one of the most transformative components of the initiative is a proposed bi-directional multi-product pipeline linking Tanga and Uganda, allowing refined petroleum products to move in either direction depending on market demand.
Under the arrangement, petroleum products refined in Uganda could be transported through Tanga for export or regional markets, while products refined or stored in Tanga could be supplied efficiently to Uganda, Rwanda, eastern Democratic Republic of Congo and South Sudan. Mr Ndejembi said the signing marked only the beginning of the process, with the MoU providing the foundation for developing a bankable investment programme capable of creating career opportunities for young engineers across the region.
Uganda’s Minister of Energy and Mineral Development, Dr Monica Musenero Masanza, described the agreement as one of the most significant developments in regional cooperation. “We have been witnessing one of the most profound events in our region. Our sister nations have agreed to undertake something very profound,” she said.
She said the partnership between Tanzania, Uganda and Vitol Bahrain demonstrates that African countries can translate their ambitions for regional integration into practical action. “We are going to partner with the private sector action speaks louder,” she said.
Dr Masanza said the projects being pursued jointly by the two countries are strategic instruments for industrialisation, job creation, trade expansion and improved logistics across the region.
She said the proposed Tanga energy hub is intended to process crude oil from multiple sources within the East African Community, strengthening regional energy security. She reiterated that Uganda’s planned inland refinery, with an initial capacity of 60,000 barrels per day and room for expansion, is complementary to the Tanga project.
“We are fully committed to participating in the refinery at the hub,” she said.
Beyond the Tanga project, Dr Masanza said Tanzania and Uganda are advancing several other joint energy initiatives.
She said feasibility and front-end engineering design studies for the bi-directional refined petroleum products pipeline and storage terminal are ongoing and are expected to be completed later this year.
She also revealed that feasibility studies for a proposed natural gas pipeline from Tanzania to Uganda are at an advanced stage and are expected to conclude by October 2026.
In addition, she highlighted progress on the planned Uganda-Tanzania 400kV electricity interconnector, noting that Uganda had secured World Bank approval for $250 million in financing in June 2026 and expressed hope that financing arrangements on Tanzania’s side would also be concluded to allow construction to begin.
She said the success of EACOP had demonstrated the ability of the two countries to work together, making it easier to advance future cross-border energy projects.
She also called for the removal of remaining trade barriers between Tanzania and Uganda, arguing that efficient cross-border movement of goods and services would lower business costs, accelerate project implementation and unlock greater industrial opportunities.
“The full economic value of these energy investments will only be realised if we remove the remaining barriers to trade between our two countries,” she said.
Register to begin your journey to our premium contentSubscribe for full access to premium content
