Thursday, July 18, 2024
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Cash-Strapped Phosphate Investor Asks For Museveni’s Rescue

Part of the Free Zone park covered with grass. Energy Minister, Ruth Nankabirwa said it is a pitty that such facility is redundant.

The financial crisis at Guangzhou Dongsong Energy Group Co. Ltd has worsened prompting the investors to appeal to President, Yoweri Kaguta Museveni for intervention to help save it from collapse.

The Chinese company that has been developing a phosphates manufacturing plant in Osukuru Tororo, says it is open to funding from non-Chinese financiers. While Chinese companies have not been receiving funding from banks outside China, L V Weidong . the president of Guangzhou Dongsong Energy Group Co. Ltd said they are open to any funding that can get out of the current financial crisis.

“Currently our mother company in China has been working with ICBC in China and export insurance Company on the funding issue. In meantime our company is still looking for other state-owned institutions in China to talk about future cooperation,” said L V Weidong. He says that if possible, they will also look for help from the government or any other institutions that are interested in their project.

The multi-million-dollar project has stalled for close to a year after losing funding from the Industrial and Commercial Bank of China (ICBC). The money was part of President Xi Jinping’s U$60bn investment package for Africa. Industrial and Commercial Bank of China (ICBC) is reported to have withheld funding to the project following ownership wrangles that ended up in court in Uganda.

While L V Weidong is appealing to President Museveni to speak to his Chinese counterpart, Xi Jinping over the possibility of ending the freeze on financing from ICBC. Speaking through a female interpreter, L V Weidong said the company has been trying to sell some of the fertilizer that it had produced but the earnings cannot jumpstart the US$620 million project

It is emerging that, L V Weidong recently met the Energy and Mineral Development Minister, Ruth Nankabirwa over a possible bailout during her formularization tour of mining projects. She confirmed that she had written to President Museveni over the matter. Nankabirwa was however categorical that the Ugandan government does not have over US$310 million that the investor is seeking.

“We are supposed to do sustainable exploitation of our natural resources so that we can achieve the social economic transformation which we are yearning for. To see a big plant like this suffocated, dormant, it hurts us because we are key stakeholders,” said Nankabirwa.

The Company planned to produce 300,000 tons of fertilizers, 300,000 tons of steel and will also build a 5-megawatt of power as part of the Uganda-China (Guandong) Free Zone of International Cooperation sitting on over 265 square kilometres of land. A visit to the facility is quite telling about the deep financial crisis. The previously neat front view is covered by bushes.

About five men had been hired to clear bushes at the front perhaps because the minister and her team had announced their visit. While the flag poles to the front were standing, short pieces of the Ugandan and Chinese flags were seen flying with most of the features missing. The paint was ripping off inside the boardroom at the convention center.

The Minister could not miss the fact that the building and other facilities were going to waste.

It was evident that no major meeting had taken place at the convention center. The front desk reception was unattended while most of the windows were covered with dust. A number of bags of bio-organic fertilizers were still in stock.

Part-time workers had on the day of the visit been hired to dust off the fertilizer in the huge factory. The heavy machinery in the factory was silent as L V Weidong took the Minister and her team on a guided tour.


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