THE UGANDAN government intends to invite the private sector to finance construction of the Kenya/Uganda petroleum pipeline, following delays in securing the required $8.1 million project equity for the pipeline, whose construction is expected to commence in April 2007, according to energy minister Simon D’Ujanga while appearing before MPs on the natural resources committee.
Mr D'Ujanga said the government had also not secured its obligation for the pipeline project development, and said Kenya and Uganda must each contribute 24.5% of the 49% total project equity, totalling $16.2m. The selected investor will raise 51% of the project equity.
Mr D'Ujanga said if the Ugandan government failed to raise the equity shares, "we may have to negotiate with the private sector for the latter to pay the government's interest or the government may have to cede its interest to the private sector." The pipeline from Eldoret to Kampala is planned for commissioning in March, 2008, and will be developed through a public-private partnership.