1. Home
  2. Stories
  3. Agriculture
  4. PPP

Gov't signs $400m hydrogen fertilizer plant

Edward Kayiwa 20th Feb, 2024 Agriculture Edward Kayiwa
Gov't signs $400m hydrogen fertilizer plant

SET: Energy Minister Ruth Nankabirwa (2R) poses with IPS and Westglass Int. officials at the signing. Left is PS Irene Batebe. COURTESY PHOTO


The Government of Uganda has signed a joint agreement with the Aga Khan’s Industrial Promotion Services (IPS) and Westgass International to set up a green hydrogen fertiliser plant in Kiryandongo District. Speaking at the signing ceremony, Energy and Mineral Resources Minister Ruth Nankabirwa, said the project seeks to increase the production of nitrogen fertiliser to about 200,000 tonnes annually. The plant is being set up in the context of the fact that agriculture, often hailed as the backbone of Uganda's economy, stands as a beacon of hope for economic growth and poverty reduction.

With nearly 80% of the population employed in the sector and given its significant contribution to GDP and exports, the importance of agriculture cannot be overstated. However, amidst the aspirations for transformation outlined in Uganda’s long-term development plans, lies the critical need to enhance production and productivity within the agricultural sector. Agricultural inputs such as artificial fertilizers are seen as vital to this process, and more so given that the soils are being over-cultivated due to the rising population.

Although Uganda holds vast arable land resources and potential for agricultural growth, the need for strategic interventions to boost domestic fertilizer production and enhance competitiveness in international markets is critical. Currently, Uganda’s fertilizer consumption per unit of arable land is estimated by the World Bank to sit at approximately 2.4kg per hectare.

  • The national fertilizer policy aims to reduce nutrient loss through soil erosion by 30 kg per hectare per year and raise the use and application levels of fertilizer to at least 50 kg of nutrients per hectare per year. The impending establishment of Uganda's first hydrogen-based fertilizer plant promises to be a game-changer in this regard, but the pressing question remains: Will this ambitious project truly address the country's productivity challenges?

At its core, the initiative holds the promise of revolutionizing Uganda's agricultural landscape, particularly against the backdrop of increasing food insecurity and climate change challenges. The production of hydrogen-based fertilizers represents a prime example of leveraging renewable energy systems to address pressing agricultural challenges, according to Ms Kate Airey, the British High Commissioner to Uganda.

Currently lagging behind regional neighbors like Kenya and Tanzania in fertilizer usage, Uganda must prioritize the promotion of fertilizer usage to sustainably increase agricultural productivity. With only 40,000 tonnes of nitrogen-based fertilizer utilized annually, there is a critical need to ramp up production to meet growing agricultural demands and drive economic growth.

  • The production of green hydrogen fertilizer, locally, has enormous transformative potential in boosting productivity and improving livelihoods. Ms Airey said renewable energy investments have broader economic and environmental benefits in driving economic growth, and addressing food security and energy poverty across the continent.
Gov't signs $400m hydrogen fertilizer plant HITECH: A hydrogen fertiliser plant installed in India. NET PHOTO

The significance of the project extends beyond agriculture, encompassing broader economic and environmental benefits. With millions across Africa lacking access to electricity, investments in renewable energy are crucial for addressing energy poverty and driving economic growth, Airey added.

The Norwegian Deputy Ambassador to Uganda, Olive Beckham, highlighted the collaborative effort to harness Uganda's abundant renewable energy resources for sustainable agriculture development, underscoring Norway's commitment to supporting projects that promote food security and utilize renewable energy sources effectively.

He said by leveraging green technologies and fostering public-private partnerships, the country can address key development challenges while promoting sustainable agriculture and industrialization. “The establishment of the hydrogen-based fertilizer plant signifies a significant milestone in Uganda's journey towards social and economic transformation. Norway is committed to supporting projects that promote food security and utilize renewable energy sources effectively,” he said.

Nankabirwa emphasized the potential for renewable energy to empower communities, boost food security and drive socio-economic development. She said the production of more than 200,000 tons of fertilizers locally would definitely improve agricultural productivity and help to mitigate the increasing food insecurity challenge. “Fertilizer use is crucial in raising and sustaining agricultural production, food security and thus reducing persistent poverty,” Nankabirwa said.

  • The project is expected to create over 300 direct jobs and mitigate climate change while fostering low carbon growth. However, amidst the optimism surrounding the project, Odrek Rwabwogo, the chairperson of the Presidential Advisory Committee on Exports and Industrial Development (PACEID), highlighted the need for strategic interventions to boost domestic fertilizer production and enhance competitiveness in international markets.
  • “This country has vast arable land resources and huge potential for agricultural growth, if we put things right, like improving fertilizer usage in order to fix production and productivity gaps,” he said, adding that by leveraging green energy fertilizers and expanding export credit funding, Uganda aims to position itself as a key player in global trade, unlocking new opportunities for economic prosperity.

Gallon Gollum, CEO of Industrial Promotion Services (IPS), emphasized the multifaceted nature of the project, viewing it as a catalyst for climate action and low-carbon growth. In October last year, the Board of Directors of the African Development Bank Group approved a project to provide 60,000 metric tons of fertilizer to 400,000 smallholder farmers in Uganda.

Under the Fertilizer Financing for Sustainable Agriculture Management project, the Africa Fertilizer Financing Mechanism is expected to provide $2m (about UGX7.6 billion) in partial trade credit guarantees and a grant of $877,842 grant to the African Fertilizer and Agribusiness Partnership.

Over a 3-year duration, the project will support two wholesalers to sell fertilizer with a value of up to 15 times the value of the $2m partial trade credit guarantee. It will also link wholesalers to around 25 hub agro-dealers and 125 retail agro-dealers who will on-sell the fertilizer to farmers. The project is expected to boost yields and will also provide training to 3.4% targeted farmers—40% of them women— on using improved seeds, balancing crop nutrition and best farming practices, the officials said.

Similar Posts You May Like 

  • Hundreds Tipped on Financial Management

    Hundreds Tipped on Financial Management..

    Hundreds of young people who turned up for season eight of the Men's Business Convention initiative, were tipped on the importance of financial management and record keeping. The three-day training, which was held at Victory Church Ndeeba on Saturday, sought to promote a culture of mentorship among..

  • Younger dairy farmers and increased consumption of UHT milk to spur sector growth

    Younger dairy farmers and increased consumption of UHT milk to spur sector g..

    Uganda's potential and fortunes in the dairy sector can grow significantly if strategies are put in place to attract a younger crop of dairy farmers and with increased investment in long life milk processing and other value added products. Jackline Kittony, the Marketing Director Tetra Pak East A..

  • Optimism as October coffee exports fetch $80 million

    Optimism as October coffee exports fetch $80 million..

    Ugandan coffee exports have continued to show a positive trend with the volume of coffee exported in October amounting to 470,000 sixty-kilogram bags, worth USD 79 million, according to the Uganda Coffee Development Authority...

  • Livelihoods at stake as poor regulation threatens Silverfish, Nile Perch

    Livelihoods at stake as poor regulation threatens Silverfish, Nile Perch..

    Amidst the luminous waters of Uganda lies a precious resource that has sustained thousands of livelihoods over the years-silverfish (Rastrineobola argentea), locally known as Mukene. The small pelagic fish is deeply interwoven with the fabric of the nation's fisheries sub-sector...

  • Coffee exports anxiety after UGX32 bn budget cut

    Coffee exports anxiety after UGX32 bn budget cut..

    The Uganda Coffee Development Authority wants Parliament to intervene following the Government's decision not to provide the UGX32.5 billion required for the establishment of a coffee traceability system in order to protect Uganda's coffee exports to the European Union...

  • Coffee export volumes show slump in March

    Coffee export volumes show slump in March..

    In comparison to the previous month, Uganda's coffee exports recorded a significant decrease in March 2024, according to the Uganda Coffee Development Authority report...

  • EU, Denmark offer UGX66 bn to Ugandan farmers

    EU, Denmark offer UGX66 bn to Ugandan farmers..

    The European Union (EU) and Denmark have announced funding amounting to more than UGX66 billion in a bid to boost agricultural productivity and help Ugandan farmers to withstand the challenges associated with climate change...

  • Activists applaud UGX 516 Bn climate allocation

    Activists applaud UGX 516 Bn climate allocation..

    In a decisive move to address the escalating climate crisis, the Government has earmarked UGX 516 billion for climate change mitigation efforts in the next financial year...

  • Optimism amidst Turkey coffee exports surge

    Optimism amidst Turkey coffee exports surge..

    Ugandan coffee exporters have found a new market in Turkey as coffee producers worldwide brace themselves for new European Union regulations that bar coffee products that are sourced from countries that degrade the environment. ..

  • Optimism as July coffee exports top 800,000 bags

    Optimism as July coffee exports top 800,000 bags ..

    Uganda's coffee exports have surged to new heights, signaling a robust boost to the nation’s economy and a promising future for farmers. ..

  • Ranches Finest commended on quality meat exports

    Ranches Finest commended on quality meat exports..

    State Minister for Investment, Evelyne Anite, has commended Ranches Finest for its sustained production and export of high- quality beef products from Uganda to the global market...

  • aBi Trust gives UCDA UGX16 bn boost

    aBi Trust gives UCDA UGX16 bn boost ..

    As Uganda races to comply with the European Union's new sustainability regulations, a major financial commitment, the Agricultural Business Initiative (aBi) has pledged $4.3 million (about UGX16 billion) to support the registration of coffee farmers, a crucial step in meeting the European Union's Re..

  • Gov't bans purchase of uncertified grain products

    Gov't bans purchase of uncertified grain products..

    Government Ministries, Departments, Agencies and institutions will not be permitted to purchase grain from uncertified suppliers, Evelyn Anite, the state minister for Investment and Privatization, has said...

  • Support beef value addition for export market

    Support beef value addition for export market ..

    Uganda’s agricultural sector is experiencing an intense transformation, with the beef industry emerging as a pivotal force in this evolution. ..

  • Local suppliers protest new grain policy

    Local suppliers protest new grain policy..

    The government's decision to tighten grain procurement rules is stirring mixed reactions among suppliers. While the government says the new regulations aim to improve grain quality, some suppliers are concerned that the costs of meeting these new standards could put them out of business...

  • August coffee exports set new 838,000 bags record

    August coffee exports set new 838,000 bags record..

    Uganda’s coffee industry soared to new heights in August 2024, earning UGX820 billion from exports, a testament to the country’s increasing prominence in the global coffee market. ..

  • Museveni commissions Royal Milk factory

    Museveni commissions Royal Milk factory ..

    Speaking at the commissioning of Royal Milk factory at Nalukolongo Industrial Park in Kampala recently, the President urged the proprietors to ensure value addition into powder milk for the lucrative export market...

  • Government announces tough export rules to China

    Government announces tough export rules to China..

    The government has introduced stringent regulations that prospective Ugandan exporters must follow if their agricultural products are to be accepted in the lucrative Chinese market...

  • Uganda, South Sudan moot joint dam projects

    Uganda, South Sudan moot joint dam projects..

    Pal Mai Deng, the South Sudanese minister of Water Resources and Irrigation, has submitted a memo to the Council of Ministers, aimed at implementing the Nyimur multi-purpose water and resource development project, a joint trans-boundary initiative aimed at providing water for irrigation and a power ..

  • 2024 coffee year earnings hit $1.4 bn record

    2024 coffee year earnings hit $1.4 bn record..

    Uganda’s coffee sector has achieved a historic milestone, with export earnings reaching an unprecedented US$1.4 billion from 6.35 million 60-kg bags in the 2023/24 coffee year, which concluded on September 30. ..

Most Recent

Popular Links