M7 launches L.Victoria logistics facility financed by Equity Bank to optimize oil transportation from Kenya to Uganda

Ugandan President Yoweri Kaguta Museveni on Thursday launched the Lake Victoria Logistics Company, which aims to reduce the cost of transporting fuel in Uganda.

Lake Victoria Logistics was established in May 2015 as Mahathi Infra Uganda with a vision to transform oil logistics in Uganda and other landlocked countries such as Rwanda, Burundi and the Democratic Republic of Congo that transport oil through Uganda.

President Museveni laid the foundation stone in 2018 and officially launched the facility on Thursday.

According to Mike Mukula, chairman emeritus of the board of directors of Lake Victoria Logistics/Mahathi Infra Uganda, the project was made possible by a $70 million loan from Equity Bank.

“I am honoured to acknowledge a key financier, which is Equity Bank and more importantly, Mr James Mwangi, a visionary Pan-Africanist, I would say, an investor in the region, who gave us the first investment of $70 million that we made here,” he said.

President Museveni at the launch of the Bugiri-Bukasa, Kavuku-Entebbe road expressed his gratitude to Lake Victoria Logistics/Mahathi Infra Uganda for its investment in Uganda.

“I am very happy to see this move. Mahathir, you have helped us a lot. I don’t know how much cheaper it is now because you didn’t give us figures, but I think it is definitely much cheaper now than before. The most important thing is that you enter the Ugandan market, once you enter our market, you are talking about markets like the Democratic Republic of Congo, South Sudan, Rwanda, Burundi, etc. So, it is really a gold mine for investors,” he said.

President Museveni also revealed that the gradual growth of Uganda’s economy was due to the correct strategy of the National Resistance Movement government.

“People who don’t understand the NRM strategy always miss the point. By 1986, Uganda’s monetary economy had collapsed, so the task then was to revive an already collapsed economy, so when you hear people talking about traffic jams and so on, it means the economy has recovered; if you don’t have money for cars and fuel, there won’t be traffic jams,” he said.

The President further explained that now is the time for rationalization since the country’s economy has recovered under the leadership of the National Resistance Movement government.

“At that stage we couldn’t deal with the other elements of rationalisation, so our current transport system is irrational, why? We have too much traffic on our roads, it’s not good for the economy, but that’s not accidental, it’s part of the strategy we took. The economy is bigger now, but it also has these irrationalities,” he explained.

“It is time for rationalisation and this project is part of that. By taking fuel off the roads you aim to rationalise the economy. I am pleased that the owners and ministers have assured the country that there is zero chance of oil contamination in the freshwater lakes, which is good, it has been completely ruled out.”

President Museveni also encouraged investors to develop capacity to transport other forms of goods besides fuel.

“I suggest you look for lasting investment areas because the current recovery phase of the Ugandan economy is over and everything is in place and now it is in the rationalization phase. You should also bring us investors who can invest in other sectors,” he said.

Equity Group Chief Legal Officer Getrude Karugaba Wamala represented Group Chief Executive Officer Dr James Mwangi.

In her speech, she said equity exists to transform lives, impart dignity and expand opportunities to create wealth.

She said: “In order to achieve its objectives and in line with its vision to be the champion of socio-economic prosperity for the African people, Equity works with development entities such as Mahathi Infra Uganda Limited to implement projects that create value at both the macro and micro levels while improving the competitiveness of the countries where we operate.”

The equity bank’s financing covers oil storage tanks, which will ensure the country has adequate capacity to store large quantities of fuel, a 256-meter-long state-of-the-art terminal infrastructure, and two tankers.

“Our significant investment underscores our commitment to supporting projects that drive economic growth and development in Uganda. The Lake Victoria Logistics Project will create jobs, improve the efficiency of petroleum product transportation, and contribute to our country’s overall economic prosperity.”

“Equity Bank is proud to be part of this project which aligns with the two core pillars of the Africa Recovery Resilience Plan: logistics, trade and investment.

She stressed: “As the leading integrated financial services provider in East and Central Africa, we are a perfect fit with the East African Community and we fully recognise and are well placed to deliver on our responsibility to support worthwhile investments that make a difference in creating jobs, promoting trade, connecting countries and overall supporting the ease of doing business. This project and others we have funded so far in Uganda are a testament to that commitment.”

Minister of Works and Transport Katumba Wamala said the project was vital to reduce the cost of fuel transportation and therefore fuel costs in Uganda and the region.

“Your Excellency, my ministry regulates all forms of transport, including road, air and water. We are involved in this project. Our country is a land transport country and we were and still are heavily dependent on road transport for the transportation of goods, including fuel and petroleum products. Road transport comes with many costs such as high road maintenance costs, fuel adulteration, road accidents, etc,” the minister said.

“This move will go a long way in reducing high maintenance costs, road traffic congestion and frequent road accidents. I just want to assure you that these boats are very safe,” he added.

Energy and Mineral Development Minister Ruth Nankabirwa thanked Mahathi Infra for providing training and technical skills to Ugandans working under the project.

She said the project was a major milestone in Uganda’s energy sector and a testament to the country’s commitment to diversifying fuel import routes and boosting economic growth.

Dr Steve Mainda, Chairman of the Board of Mahathi Infra Uganda, said fuel transportation in Uganda is limited to road transport, a mode of transportation that has been operating for many years but faces challenges and is inefficient.

However, he pointed out that with the coming of Lake Victoria Logistics, such inefficiencies will no longer exist.

“The vision of the project is to create a more efficient and sustainable solution to relieve road congestion, ease traffic at border crossings, reduce the turnaround time and cost of fuel being brought here from Mombasa. We have invested $100 million in the project,” he said.

Dr Mainda further noted that the company already has two state-of-the-art tank vessels built in Uganda, each with a tank capacity of 4.5 million litres.

“The ships are already operational and each ship can make 10 trips a month. Our current transport capacity is 90 million litres per month. We plan to build two more ships to take the monthly transport capacity to 180 million litres,” he said.

The facility also establishes a whole new logistical ecosystem for fuel in the region by setting up 14 tanks with a total storage capacity of 70,000,000 litres. This is the largest fuel storage capacity in Uganda and East Africa.”

Dr Mainda also told the President that they have built a 256-metre long pier at Bugiri-Bukasa to facilitate berthing of vessels and enable efficient cargo loading and unloading.

Mike Mukula, chairman of the board of directors emeritus of Lake Victoria Logistics/Mahathi Infra Uganda, thanked President Museveni for the support he has given to the company.

“Sir, you hosted us in Nakasero in 2017, which was the beginning of my journey and I want to thank you personally,” he said.

“This investment will be a major catalyst in reducing the cost of doing business in the country as transport is one of the main cost drivers and Lake Victoria Logistics will significantly reduce the cost of transport between Kisumu and Uganda and we would like to thank you for your initiative and foresight in making UNOC the main partner in delivering fuel to the country.”

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