Sanctioned Russian Arms Manufacturer, Rostec, Awarded $4 Billion Uganda Refinery Contract

It was announced by Uganda’s Energy Ministry that RT Global Resources, a subsidiary of Russian state-owned Rostec, has been awarded a $4 billion oil refinery project.  Rostec is one of Russia’s major defense and technology corporations and its CEO, Sergei Chemezov, is presently sanctioned by the United States (since April 2014) and the European Union (since September 2014).  Among other brands and weapons manufacturing subsidiaries, Rostec counts the manufacturer of the Kalashnikov rifle among its affiliated enterprises.

RT Global Resources reportedly beat out a South Korean consortium to win the contract.  It still remains for the company and Ugandan authorities to negotiate the finer points of the joint venture enterprise that will be established to engineer and finance the $2.5 billion refinery as well as the product pipeline and related infrastructure.

Uganda’s President Yoweri Museveni has reportedly established a close relationship with President Putin and a foreign policy that is characterized by defiance towards the West.  In this connection, a Ugandan government spokesman, Ofwono Opondo, said, “The West won’t dictate to us who we do business with, even if the Chief Executive [of Rostec] is under U.S. sanctions.  We have very cordial, diplomatic relations with Russia — they supply us [with] military equipment, they train our officers.  We are not going to allow anybody to choose our friends.  If the West has problems with Putin, that is their problem.”

According to the Financial Times, Uganda has purchased more than $700 million of Russian fighter jets since 2011 from major Russian arms exporter, Rosoboronexport (which is also related to the Rostec family of companies).