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7/11/2012 | Uganda Investment Authority

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Investment OpportunitiesInvestment OpportunitiesInvestment OpportunitiesInvestment Opportunities

Presented By: TOM BURINGURIZA

Ag Executive Director

At: Seminar on Economic Opportunities in Uganda

Venue: ICE HQs, Rome, ITALY

Date: 11th July 2012

UGANDA: The Pearl of Africa

Structure of the Presentation

• Uganda Country Overview

• Status of Business Climate & Investment in

Uganda

• Investments Opportunities

• Procedures for Setting up Investments

• Investment Incentives

• National & Organizational Challenges

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Land Area 199,807 km2

Lakes, rivers, swamps 41,743 km2

Total Area 241,039 km2

Population (2012 mid year) 34 .1

million, at 3.5% growth pa

Per Capita GDP (2011) USD 563

Economic Growth (2011) 3.2%

Inflation rate (2011) 18%

Uganda’s age distribution*

0-14 years -49.90%

15-64 years-48.10%

65 years and above- 2.10%

NB: young productive population*Source: CIA World Fact Book - 2010

Uganda: A Land linked Country at the Heart of Africa

UGANDA

7/11/2012 |

The National Vision

Vision of the National Development Plan (NDP)

“ A transformed Ugandan Society from a peasant to a modern & prosperous country within 30 years.”

Elements of NDP

• Stability & Peace

• Knowledge based economy

• Exploitation of resources gainfully & sustainably

• A strong federated East Africa with an effective African Common market, ….

• Private Sector Led Economy

Uganda’s GDP Composition


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Source: Uganda Bureau of Statistics, Statistical Abstract 2011

Status of Business Climate and Investment in Uganda

General Trend of FDI


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1991–2011: Licensed projects over 6,000 worth about US$12 billion of planned investments

According to UNCTAD, actual FDI peaked US$848 million in 2010 upfrom an annual average of US$167 million registered between 1995 and 2004

In terms of country ranking by FDI performance, Uganda has movedfrom number 64 in the world in 2008 to 41st position in 2010 out of 141 world economies.UNCTAD, World Investment Report 2011; www.unctad.org/wir


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Country Sources of Investment in 2011


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Ugandan owned projects: 33.3% of the total number and 59.6% by value

Foreign owned projects: 36% by value and 59.7% by number

In 2011 alone, UIA licensed 273 projects worth US$1.3 billion ofplanned investments.

Uganda: Fore Runner in the EAC for FDI

Source: UNCTAD World Investment Report, 2011

Top FDI sources in million US $, 1991 – July 2010

Source: UIA database

1) United Kingdom

2) India

3) Kenya

4) China

5) Singapore

6) USA

7) Canada

8) South Africa

9) Pakistan

10) Australia

Ease of Doing Business Ranking in SSA


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Source: www.doingbusiness.org

Bilateral Investment Treaties Avoidance of Double Taxation Treaties

Country Date Country Date

Mauritius Tuesday, August 19, 2003 Mauritius Tuesday, August 19, 2003

France Friday, January 03, 2003 India Wednesday, April 30, 2003

Denmark Monday, November 26, 2001 Italy Friday, October 06, 2000

Netherlands Tuesday, May 30, 2000 Netherlands Wednesday, May 03, 2000

South Africa Monday, May 08, 2000 Denmark Dec. 22, 1954 & Jan, 2000

U. K. & Ireland Monday, April 20, 1998 Norway Tuesday, September 07, 1999

Italy Friday, December 12, 1997 Kenya Wednesday, April 14, 1999

Egypt Saturday, November 04, 1995 Tanzania Wednesday, April 14, 1999

Bilateral Investment and Double Taxation Treaties Concluded with Uganda


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Source: International Trade Centre, www.trademap.org

Uganda’s Export Partners (2010)


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Source: International Trade Centre, www.trademap.org

Uganda’s Import Partners (2010)

3 Reasons Why Uganda is Good for Business

1. Productive Labour

2. Resource Rich

3. Location, Market size and Access

MARKET

Uganda- 35.8Million

East Africa - 126 million

Great Lakes Region-190 million

COMESA

- 19 member countries

- 400 million people.

- Imports over US$ 170bn p.a.

*Source: CIA World Fact Book - 2010

Focus for investment promotion.

• Agri � business (value addition)

• Mineral beneficiation

• SME development (Oil and Gas, Business

linkage – manufacturing and services, etc)

• Tourism (hotels)

• ICT

Presentation on UIA work plans 2011/2012

Investment Opportunities in Energy and Agroprocessing


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Overview of Uganda’s Energy Sector

1. Uganda’s energy mix comprises: biomass (92%), petroleum (6%) and

electricity (2%)

2. Level of electrification is low with 5% of the population connected to the

national grid. Less than 1% of the rural areas has access to the national grid.

About 88% of Uganda’s population lives in the rural area.

3. Uganda receives 2500 – 3200 hours of sunshine per year and a mean solar

radiation of 5.1 Kwh per square metre per day on a horizontal surface, which

provide viable potential for solar energy production

4. Fully liberalized energy regime where the private sector produces power

and sells it to the national grid


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Energy

Large Hydropower SitesThe large hydropower potential is mainly along the River Nile in Uganda and has been estimated at 2,000 MW. Only 380MW of the large capacity is currently exploited and this is at Jinja in the Kiira (200) and Nalubaale (180) Power stations.

Source: www.era.or.ug


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Medium Hydro Power Sites

Site River Estimated Capacity (MW)

Musizi Musizi 10

Bogoye Mubuku 7.5

Nengo Bridge Ntungu 12.0


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Renewable Energy Investment Opportunities

1. The design, construction, sales and service

support of biomass / solar / and mini hydro

plants to generate electricity

2. Assembly and making of solar units

3. Manufacture and marketing of charcoal

briquettes

4. Acquisition, installation and services of micro

hydro power plants

5. Export opportunities exist in the Great Lakes

Region and COMESA

6. Generation of power from garbage does not

exist in Uganda yet there is an increasing

population giving rise to increased amounts of

garbage


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Uganda Electricity Transmission Company Ltd

(UETCL) has export contract obligations with

neighbouring countries as follows: Kenya (30

MW), Tanzania (9 MW) and Rwanda (5 MW).

However, the 30 MW to Kenya is supplied

only during off-peak hours and only 9 MW

and 5 MW exports go to Tanzania and

Rwanda respectively. However, arrangements

have been finalised for Uganda to export firm

capacity of 50 MW to Kenya after the

commissioning of the Bujagali Project.

Uganda is also committed to supply 60MW to

the Democratic Republic of Congo with

enormous market

potential in the South Sudan.Source: Statistical Abstract (2010)

Energy Export Market Potential


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Name of Company Country of Origin Area of interest

1. Kikagati Power Company Ltd Norway Mini-Hydropower Plant

2. Electro-Maxx (U) Ltd United Kingdom Thermal Power Plant

3. Bioenergy Group Ltd Denmark Jatropha Farming

4. African Power Initiative Ltd United States Jatropha Farming & Processing

5. Jacobsen Uganda Power Plant (U) Ltd Norway Thermal Power Plant

6.Neptune Petroleum (U) Ltd Virgin Islands Petroleum Exploration

7.Eco Power (U) Ltd Sri Lanka Mini-Hydropower Plant

8.Hydromax Ltd India Hydropower Power Plant

9.Sugar Corporation Of Uganda Ltd United Kingdom Co-Generation

10. Bujagaali Energy Ltd Uganda Large Hydropower Plant

11.Uganda Biofuels Ltd Germany Jatropha Farming

12.Hardman Petroleum Africa Nl Australia Petroleum Exploration

13.Tam Oil East Africa Ltd Libya Oil Pipeline

14.Eskom Uganda Ltd South Africa Electricity Generation

15.Umeme Bermuda Electricity Distribution

16. Tullow Oil Ireland Petroleum Exploration And Refining/gas

energy generation

The Uganda Investment Authority has licensed 112 projects in the energy sector with

planned investments worth over US$1.2 billion. Below are some major investors

Some Players in the Energy Sector

Agriculture

Crops

Horticultural

Products

Floriculture

FruitsVegetables

Growing

and

Processing


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Agribusiness

Investment Opportunities include:

• Commercial Farming (crops,

Forestry and aquaculture)

• Value addition

• Manufacture of inputs

• Supply of agriculture machinery

• Refrigeration Services

• Agriculture Banks

• Organic products farming

Agricultural Investment Successes in Uganda

COMPANY ACTIVITY

BIDCO - Palm oil production in partnership with local out growers

- Edible oil processing factories in Uganda, Kenya and

Tanzania

Madhvani Group -Sugar plantations and processing

- Horticultural and tea production/ processing and supply

to the region

Mukwano Group Vegetable oil production / tea / and sunflower processing

to supply the region

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Other Priority Sectors

� Tourism

� ICT

� Mining

� Infrastructure ( Roads, Rail, etc )

� Oil and Gas

� Manufacturing

� Services – Health, Education, Financial services

Uganda Investment Authority

Procedures to Set Up Investment

1. Register a local company in Uganda (URSB)

2. Acquire a secondary license in some sectors e.g mining, fishing, finance,

energy

3. Acquire Investment licence from Uganda Investment Authority (UIA)

4. Environment Impact Assessment (EIA)

5. Acquire Land – commercial, industrial…

6. Implement the project

NB:

• Company registration, investment licensing, tax registration & advice,

and Immigration issues are all done at the UIA

• The Import and Export Business does not require an Investment License

30Uganda Investment Authority


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� Non negotiable

� Non discretionary

� Available to all investors, local and foreign

� There are some additional sector specific tax exemptions

� In the UIA Industrial Parks, investment in the following

areas may access free land; Agro processing, ICT, and

Mineral beneficiation

Incentives

Investment Code Guarantees and Dispute Settlements

•INVESTMENT CODE PERMITS INTERNATIONAL ARBITRATION

•UGANDA HAS INVESTMENT TREATIES WHICH ALLOWS A RECOURSE TO INTERNATIONAL RBITRATION SECURITY OF INVESTMENT

•GUARANTEED UNDER THE CONSTITUTION AND THE INVESTMENT CODE 1991

•UGANDA IS A SIGNATORY TO MAIN NTERNATIONAL INVESTMENT RELATED INSTITUTIONS (MIGA, OPIC,ICSID, TRIMS, GATS, ETC)

Some Constraints to Investment

1. Infrastructure – lack of functioning railway from the sea port.

However, efforts are underway to solve this. Electricity supply

is still insufficient and costly

2. Access to Finance - interest rates are high

3. A few Administrative barriers


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Some Multinationals in Uganda


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Multinationals


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Uganda Investment Authority

Twed Plaza - Plot 22B,

Lumumba Avenue

P.O. Box 7418, Kampala

Uganda

Tel.+256-(0)414-30-10-00

Fax +256-(0)414-34-29-03

www.ugandainvest.go.ug

[email protected]

Thank YouThank YouThank YouThank You

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