Kampala, 13 April 2022 Equity Bank Uganda and the Uganda National Oil Company (UNOC), have signed a Memorandum of Understanding, to facilitate and strengthen collaboration between the two entities in the areas of financing and enterprise development specifically for MSMEs, clean energy use and environmental conservation sectors. Also, financing will be supplied in support of farmers, education and training for young people and more affordable and accessible health systems for all.
Speaking during the signing ceremony which took place at the Kampala Serena Hotel during the 8th Annual Oil and Gas Convention, Equity Group Holdings Plc Group Managing Director, and CEO Dr. James Mwangi, said, “The opportunity for Ugandans and the entire region to benefit from the wealth creation possible around the development of the oil and gas sector and all its support sectors is significant. Wealth creation is the quickest tool to lift our people from poverty and the needs of the oil and gas sector will serve as this vehicle.”
“This MOU brings our two organisations together as promoters of development of the oil industry in Uganda, representing national interest, the Government and the people of Uganda and of a regional financial group that has the capability and knowledge to allow citizens to participate in economic activities and to ensure that the oil industry and development is fully integrated into the economy so that there can be a fairer distribution of income and the benefit of the oil industry development,” said Dr James Mwangi.
Adding, “It is when we fund the entire ecosystem with a revolving fund that supports the entire oil sub-sector that we will solve the problem of financial inequity such that cash is moving from one partner to the other at different stages. We have set aside USD 6 Billion for this revolving fund. But the most important thing is the component of capacity building.”
The CEO of UNOC Proscovia Nabbanja said, “One of the challenges we have discovered as the local companies is the aspect of financing and that is why we are partnering with reputable organisations like Equity Group to bring financial products that are tailored for the SMEs to participate in the sector. We bring the opportunities; we ride on the back of financial institutions like Equity so that we support the local companies to participate.”
She also noted that “We should not look at the oil industry in isolation. I think Equity Group has done a phenomenal job using their model in supporting other sectors of the economy and we want to ride on that experience and replicate such models in the oil and gas industry.”
Through programs run by the Equity Group Foundation such as Young Africa Works, the parties shall work to scale up financial inclusion and shared prosperity through financial literacy to the population in the oil region, especially women and youth, support for farmers providing food for the ecosystem, health services for supply chain workers, and educational scholarships and leadership opportunities for young scholars.
It will also see the parties provide training in financial education and business management skills to facilitate access to finance for the MSMEs and the matchmaking of joint venture partnerships for players in the oil and gas value chains to enhance collaboration and greater capacity.
In the areas of Clean Energy and Environmental Conservation Equity shall work with UNOC to implement carbon capture programs. This will be achieved through carbon offset initiatives that will allow investments in environmental projects that will balance UNOC’s own carbon footprint.
Under this program, initiatives such as support to households and MSMEs to adopt cleaner sources of energy and modern technologies through training and finance (renewable energy) shall be considered. Also support to players within the Commercial and Industrial sectors to adopt cleaner and more efficient production processes (energy efficiency) and waste management projects aimed at capturing methane from landfill sites and from agricultural activities (waste to energy).
The collaborations will also see the parties support farmers in the oil regions to adopt climate-smart agriculture to reduce GHG from agricultural activities.
Under the MOU local farmers will get support in food production along diverse value chains to supply adequate nutritious food to not only the oil and gas workers, but also for sale to other markets and support to farmer groups in value addition and processing.
Given the inadequate skillsets in the region, the parties and the partner shall collaborate in the development of skills for Ugandans to participate in the Oil and Gas sector (local content) through initiatives such as sponsorship for short courses and industry certification programs and support to Vocational Institutes (TVET) students to acquire technical skills for job creation within the sector ecosystem.
Uganda National Oil Company Limited (UNOC) is a limited liability company solely owned by the Government of Uganda. It was established under Section 42 of the Petroleum (Exploration, Development, and Production) Act and Section 7 of the Petroleum (Refining, Conversion, Transmission and Midstream Storage) Act, both of 2013. It was incorporated under the Companies Act of 2012 as a limited liability company on June 12th, 2015.
UNOC is mandated to handle the Government’s commercial interests in the petroleum sector and to ensure that the resource is exploited in a sustainable manner.
The Company is also mandated to investigate and propose new upstream, midstream, and downstream ventures initially locally and eventually internationally.
UNOC has two wholly owned subsidiaries namely the Uganda Refinery Holding Company Ltd (URHC) and National Pipeline Company (U) Ltd (NPC). URHC will hold a participating interest of up to 40% in the impending refinery to be developed in Kabaale, Hoima and manage the development of Kabaale Industrial Park (KIP).
The NPC will hold a participating interest of up to 15% in the 1443-kilometer East African Crude Oil Pipeline (EACOP) on behalf of the Government of Uganda. It will manage the development and operations of storage terminals and pipelines as well develop downstream supply and trading business.
UNOC operates across the petroleum value chain with interests in the upstream (exploration to production), midstream (refining, transportation, and storage) and downstream (bulk trade business) segments of the petroleum value chain.
About Equity Bank Uganda
Equity Bank Uganda began its operations in 2008 and is regulated by Bank of Uganda. The Bank has its Head Office in Kampala and a network of forty-three branches, 5,152 Equi duuka agents, 6,048 merchants and 48 ATMs spread across the country and serving over 1.2 million customers.
Equity Bank Uganda is a subsidiary of Equity Group Holdings Plc, a financial services company listed at the Nairobi Securities Exchange, Uganda Securities Exchange, and Rwanda Stock Exchange. In addition to Equity Bank Uganda, the Group has banking subsidiaries in, Kenya, Rwanda, Tanzania, DRC, South Sudan, and a Commercial Representative Office in Ethiopia; with additional non-banking subsidiaries engaged in the provision of investment banking, custodial, insurance agency, philanthropy, consulting, and infrastructure services.
Equity Group is the largest bank in the region with assets of USD 12 billion. It is also the largest bank in terms of deposits, with a market capitalisation of USD 2 billion and a customer base of over 15 million. The group has 337 branches, 56,772 agents, 32,269 merchants, 697 ATMs and has widely adopted digital banking channels.
The Banker's Top 1,000 World Banks 2021 ranked Equity Bank 761 in its global ranking, position 39 globally on return on assets, position 71 on return on capital, and position 149 on soundness (Capital Assets to Assets ratio). The Banker's Top 100 African Banks 2020 ranked the Bank 7th among the top 10 banks in Africa, 5th for strength, 9th for growth performance, 8th for return on risk and 6th for profitability and leverage category. In the same year, Moody's gave the Bank an overall rating of B2 with a negative outlook, identical to the Kenyan government's sovereign rating, due to the Bank's strong brand recognition, strong liquidity buffers and resilient funding profile, well-established national franchise, and strong adoption of digital and alternative distribution channels.