Uganda, Tanzania move beyond EACOP with $20b regional energy hub

Uganda and Tanzania are moving to deepen their energy partnership beyond the East African Crude Oil Pipeline (EACOP), with the two countries launching plans for a regional energy hub in Tanga that could attract more than $20 billion in investment.

The development follows a Memorandum of Understanding signed in Dar es Salaam on Thursday between the Uganda National Oil Company (UNOC), Tanzania Petroleum Development Corporation (TPDC) and Vitol Bahrain E.C. to jointly develop the Tanga Regional Energy Hub.

The agreement was witnessed by President Yoweri Kaguta Museveni and his Tanzanian counterpart, Samia Suluhu Hassan, as the two leaders seek to broaden economic cooperation between the neighbouring countries.

The proposed hub is expected to position Tanga as a regional centre for petroleum storage, refining, logistics, trading and distribution, building on the infrastructure being developed under EACOP.

For Uganda, the project is expected to complement the planned 60,000-barrel-per-day Hoima refinery and create additional opportunities for the country to trade refined petroleum products across the region.

Tanzania’s Minister of Energy, Deo Ndejembi, said the new partnership represents the next phase of cooperation between the two countries after EACOP.

“The story we celebrate today did not begin in 2026. It began several years ago when Tanzania and Uganda made the courageous decision to deepen cooperation in the petroleum sector,” Ndejembi said.

While EACOP provides the infrastructure for transporting Uganda’s crude oil to the Tanzanian coast, Ndejembi said the proposed Tanga hub would create additional value from the petroleum resources.

“EACOP transports molecules. The Tanga Regional Energy Hub transforms those molecules into prosperity,” he said.

According to Ndejembi, the proposed development could attract investments exceeding $20 billion, potentially making it one of the largest integrated energy infrastructure projects in sub-Saharan Africa.

The project is also expected to strengthen petroleum supply chains in East and Central Africa by providing infrastructure for storage, refining, trading and distribution.

Uganda’s Minister of Energy and Mineral Development, Monica Musenero, said the partnership demonstrates how regional cooperation can be turned into practical investments capable of supporting industrialisation.

“For a long time, Your Excellencies have advocated for a united Africa driven by common interests and shared trade. While we often speak about these aspirations, action speaks louder than words,” Musenero said.

She said the projects being developed by Uganda and Tanzania should not be viewed merely as infrastructure projects, but as tools for creating jobs and expanding regional trade.

“These are not merely infrastructure projects. They are strategic investments that will create jobs for our young people, deepen regional trade and strengthen the logistics systems that support our economies,” she said.

Musenero said Uganda’s strategy is to use its petroleum resources as a foundation for wider industrial development rather than simply exporting crude oil.

“We must ensure that we are not simply trading these resources as commodities. We need to extract greater value by developing secondary and tertiary industries, building the knowledge economy and creating high-skilled jobs in engineering, operations, maintenance, laboratory analysis and management,” she said.

She said feasibility and front-end engineering design studies for a proposed refined petroleum products pipeline and storage terminal are progressing and are expected to be completed later this year.

The two countries are also working on a proposed natural gas pipeline linking Uganda and Tanzania, with feasibility studies expected to be concluded by October.

The energy partnership extends beyond petroleum.

Musenero said Uganda has also secured $250 million in financing for its section of the planned 400kV Uganda-Tanzania electricity interconnector after concluding negotiations with the World Bank in March.

The interconnector is expected to increase electricity exchange between Uganda and Tanzania, strengthen the Eastern Africa Power Pool and potentially facilitate electricity trade extending towards Southern Africa.

The expansion of the energy partnership comes as Uganda prepares to develop its domestic petroleum industry around the Hoima refinery.

However, Tanzania moved to reassure Uganda that the Tanga hub would not undermine the refinery project.

Ndejembi said Tanzania supports Uganda’s decision to refine its crude oil domestically as part of its industrialisation strategy.

“Uganda’s decision to develop the Hoima refinery reflects its sovereign objective of maximising value from its petroleum resources through domestic refining and industrial development. Tanzania fully supports that ambition,” he said.

He said the two projects would instead complement each other, particularly through a proposed bidirectional multi-product pipeline that would allow refined petroleum products to move between Uganda and Tanzania depending on market demand.

Such infrastructure, he said, would give Uganda wider access to regional markets while improving energy security across East Africa.

Musenero similarly said the Tanga hub should not be viewed as competing with Uganda’s refinery.

“The hub is complementary. Together, these projects will strengthen regional energy security while enabling East Africa to retain more value from its petroleum resources,” she said.

The emerging partnership marks a shift in the relationship between the two countries from cooperation focused largely on transporting Uganda’s crude to the Tanzanian coast to a broader attempt to build interconnected energy infrastructure and markets.

Musenero said the successful implementation of EACOP had demonstrated that Uganda and Tanzania could deliver complex cross-border projects, creating confidence for larger investments.

For Tanzania, the Tanga hub could strengthen the country’s position as an energy and logistics gateway, while Uganda stands to gain new routes for refined products, investment and industrial development.

The two governments now face the task of turning the agreements into bankable projects as they seek to use energy infrastructure to drive wider trade and industrialisation in the region.

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