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

The Ugandan government has entered into a joint development agreement with Industrial Promotion Services and Westgass for the nation's inaugural green hydrogen-based fertilizer initiative. This groundbreaking project, anticipated to cost $400 million and supported by European funds, aims to produce 200,000 tonnes of mineral fertilizers annually in Karuma. Industrial Promotion Services, affiliated with the Aga Khan Fund for Economic Development, and Norway's Westgass have secured a convertible loan from Norfund, a Norwegian state-owned entity, and a grant from Norad, a development agency.

The development strategy involves harnessing 100MW of electricity from the Karuma Hydro Power Station, which has faced prolonged delays but is expected to be fully commissioned in September 2024. The generated green hydrogen will undergo a multi-step process, including conversion into ammonia and further processing into calcium ammonium nitrate and nitrogen-phosphorus-potassium fertilizers. The project aims to reduce Uganda's dependence on imported fertilizers, whose prices are subject to the volatile gas market.

Odrek Rwabwogo, Chairman of the Presidential Advisory Committee on Exports and Industrial Development (PACEID), expressed optimism about leveraging Uganda's abundant natural resources and innovative technologies to contribute to the agricultural sector's growth, aligning with the government's ambitious $6 billion export target for non-oil revenue. While details on the electrolyser capacity remain undisclosed, the project aligns with Uganda's efforts to enhance its electricity infrastructure, including the recently launched $638 billion rural electrification program supported by the World Bank, emphasizing solar PV for off-grid electricity provision. Questions about potential additional exports from crops cultivated with domestically produced green fertilizers and global market sales of the produced chemicals have been directed to PACEID for clarification.