East Africa’s Energy Future Takes Shape: Uganda and Tanzania Forge Regional Value Hub in Tanga

In a significant stride towards realizing East Africa’s industrial ambitions and energy independence, Presidents Yoweri Museveni of Uganda and Samia Suluhu Hassan of Tanzania met in Dar es Salaam to inaugurate a new, transformative phase of their energy partnership. At the heart of this collaborative effort is the Tanga Regional Energy Hub, poised to fundamentally reshape how the region harnesses and benefits from its vast petroleum resources, moving beyond mere extraction to robust value addition and distribution.

The landmark occasion saw the signing of a Memorandum of Understanding (MoU) between the Uganda National Oil Company (UNOC), the Tanzania Petroleum Development Corporation (TPDC), and Vitol Bahrain E.C. This tripartite agreement solidifies plans to jointly develop the Tanga hub, envisioning it as a comprehensive center for petroleum storage, refining, logistics, trading, and distribution. Ugandan Minister of Energy and Mineral Development, Dr. Monica Musenero, hailed the pact as a “powerful demonstration of regional cooperation” and a testament to the leaders’ long-held vision for a “united and prosperous Africa.”

While the ongoing East African Crude Oil Pipeline (EACOP) represents a monumental infrastructure achievement facilitating crude oil transport, the Tanga Regional Energy Hub signifies a strategic evolution. Tanzania’s Energy Minister, Hon. Deo Ndejembi, articulated this shift profoundly, stating, “EACOP transports molecules. The Tanga Regional Energy Hub transforms those molecules into prosperity.” This hub is designed to leverage the raw resource transported by EACOP, converting it into refined products that serve regional markets, thereby retaining substantial economic value within East Africa. The ambition is immense, with Ndejembi projecting the potential to attract investments exceeding US$20 billion, making it one of Sub-Saharan Africa’s largest integrated energy infrastructure developments.

The Tanga hub is not an isolated venture but a cornerstone of a broader, integrated energy strategy for Uganda and Tanzania. Crucially, it complements Uganda’s planned 60,000-barrel-per-day Hoima refinery, rather than competing with it. Officials emphasized that both projects aim to maximize value from petroleum resources through domestic processing and industrial development. Further enhancing this synergy is a proposed bidirectional multi-product pipeline, which will efficiently transport refined petroleum products between the two nations, optimizing supply and export opportunities based on market demand.

Beyond petroleum, the energy partnership extends to natural gas and electricity. Feasibility studies for a natural gas pipeline connecting Uganda and Tanzania are advancing rapidly, aiming for completion by October 2026. Concurrently, significant progress has been made on the Uganda–Tanzania 400kV electricity interconnector, with Uganda securing US$250 million in World Bank financing in June for its section. This interconnector is set to bolster electricity exchange, strengthen the Eastern Africa Power Pool, and open new avenues for power trade with Southern Africa.

Dr. Musenero underscored that these initiatives are more than just infrastructure projects; they are “strategic instruments for industrialisation.” By developing downstream industries, the region aims to create high-skilled jobs in engineering, operations, maintenance, and laboratory analysis, moving away from simply exporting raw commodities. This focus on value addition is critical for building a knowledge economy and ensuring long-term economic growth and resilience. The successful implementation of complex cross-border projects like EACOP has already boosted investor confidence, paving the way for these ambitious future investments.

The collaborative spirit demonstrated by Presidents Museveni and Samia Suluhu Hassan marks a pivotal moment for East Africa. The Tanga Regional Energy Hub, alongside the Hoima refinery, inter-country pipelines, and electricity grids, collectively represent a bold commitment to regional integration, energy security, and sustainable industrialization. As these projects advance, they promise to unlock unprecedented economic opportunities, transform local economies, and establish East Africa as a dynamic and self-reliant player in the global energy landscape.