Uganda unveils $400m green hydrogen-based fertiliser project, backed by Norwegian state funds

The government of Uganda has signed a joint development agreement with two developers for the first ever green hydrogen-based fertiliser project in the country, reportedly set to cost $400m and backed by European funds.

The project is now being developed by Industrial Promotion Services, a Kenya-based industrial and infrastructure development arm of the Aga Khan Fund for Economic Development, and Norway-headquartered green energy firm Westgass.

The pair have already secured a convertible loan from Norwegian state-owned Norfund and a grant from development agency Norad.

The project aims to produce 200,000 tonnes of mineral fertilisers a year in Karuma, in order to displace Uganda’s current imports of fertilisers, prices for which are linked to the highly volatile gas market.

The developers plan to produce green hydrogen, before processing it into ammonia, then calcium ammonium nitrate, and ultimately nitrogen-phosphorus-potassium fertilisers.

“Utilising Uganda’s rich natural resources and innovative technologies, this project is poised to propel the agricultural sector towards achieving the ambitious $6 billion export target,” said Odrek Rwabwogo, chairman of the Presidential Advisory Committee on Exports and Industrial Development (PACEID), referring to a government ambition to boost non-oil revenue.

Hydrogen Insight has reached out to PACEID to confirm whether this means additional exports from crops grown with domestically produced green fertilisers, or if any of these chemicals could also end up sold to global markets.

While the facility’s electrolyser capacity has not been disclosed, it plans to draw on 100MW of power from the nearby Karuma Hydro Power Station, a 600MW hydroelectric plant expected to be fully commissioned this September after years of delay.

Uganda’s grid has 1.4GW of generation capacity compared to less than 850MW of demand, according to figures from the US International Trade Administration, although the agency notes that demand for electricity could be suppressed by a lack of reliable transmission infrastructure.

The government had earlier this month launched a $638bn rural electrification programme backed by World Bank funding, which includes the rollout of solar PV to provide off-grid electricity to buildings.