In a major move to advance its national energy strategy, the Ugandan government has signed a Public-Private Partnership Agreement (PPA) with Bukona Agro Processors Limited to support the country’s Biofuels Blending Programme. The deal, signed at Asinge ‘A’ Village in Malaba Town Council, Tororo District, is expected to directly benefit over 10,000 smallholder farmers in Nwoya District, reports Monitor.
Under the agreement, these farmers will supply 30,000 tonnes of maize each year—15,000 tonnes per season—which will be processed into ethanol. This ethanol will be blended with petrol (petroleum motor spirit) at Bukona’s newly established depot in Malaba.
Speaking on behalf of the Ministry of Energy and Mineral Development (MEMD), Mr. Hatimu Muyanja praised the agreement as a practical example of national policy reaching and improving rural communities. “This partnership is proof that government energy programmes can deliver real economic opportunities at the village level,” said Eng. Irene Bateebe, MEMD Permanent Secretary, in a statement read by Mr. Muyanja.
The programme, which also involves crops like cassava and sugarcane, is designed to offer farmers stable income through guaranteed markets. Village Savings and Loan Associations (VSLAs) will serve as the main supply network for ethanol feedstock.
Mr. Muyanja also pointed out the logistical benefits of local ethanol blending. “By blending the ethanol directly at Malaba, we reduce the need to transport ethanol across the country, making the entire process more efficient,” he said.
Mr. Godfrey Ocitti Odoki, Nwoya District’s Commercial Officer, said the district is well-prepared to support the initiative, with over 170 farmer associations and more than 4,800 VSLA groups. Each sub-county has over 400 groups, and each parish more than 100. He added that sugarcane cultivation is being piloted to further support long-term supply.
While challenges like limited funding and climate change remain, Mr. Odoki said they are being addressed through credit access from Centenary Bank and the introduction of irrigation systems.
Bukona Agro Processors Managing Director Mr. Praviin Kekal shared that the blending depot in Malaba has already attracted between Shs2.5 billion and Shs3 billion in investment. He said their focus remains on Nwoya District for sourcing raw materials directly from farmers at fixed prices, with support from financial partners to provide seeds and farm inputs.
“We will start by blending ethanol sourced from other producers, and once the market stabilizes, we’ll begin our own production,” Mr. Kekal explained. He estimated the depot will blend 450 million litres of petrol annually. At a 5% ethanol blend, about 22 million litres of ethanol will be required, rising to 88 million litres if the blend increases to 20%.
Mr. Gerald Kyobe, speaking for Nwoya’s Chief Administrative Officer, said this was not the district’s first collaboration with Bukona, which has already played a key role in boosting the local economy.
Energy Minister Ruth Nankabirwa had earlier announced that Uganda would start blending petrol with 5% ethanol (E5) beginning July 1, as outlined in the Biofuels Act, 2020, with plans to gradually move to a 20% blend.
Four companies have so far been licensed to blend fuel at key border locations: Modern Energy Ltd in Busia, Bukona Agro Processors in Malaba, Afro-Kai Ltd in Mutukula, and Lake Victoria Logistics in Entebbe. Together, they are expected to blend around 110 million litres of petrol annually using ethanol made from maize, cassava, and sugarcane.
