Atiak sugar factory seeks additional government funding for Nile water pipeline to revive operations 

UGANDA – Atiak Sugar Factory has called on the Ugandan government for additional funding to install water pipelines from the River Nile to support its irrigation needs, ensuring the sustainability of sugarcane cultivation and the full resumption of factory operations.  

This request comes after a government investment of UGSH108 billion (US$29.5M) in the 2022/23 fiscal year aimed at mechanizing and improving the factory’s irrigation infrastructure. 

According to the factory’s Director of Planning, Mohamoud Ahmed, the sugar facility, which has been closed since March 2022 due to a cane shortage and fire incidents in its plantations, can only return to full production with a stable irrigation system in place. 

Ahmed emphasized the importance of government intervention in constructing a 22-kilometre pipeline from the Nile to the factory.  

The estimated cost of this irrigation project is US$43 million, which would ensure the factory’s ability to grow sugarcane during the dry season and maintain continuous operations. 

While Atiak Sugar Factory has made progress in setting up irrigation infrastructure, Ahmed noted that a reliable water supply from the Nile remains crucial for large-scale operations.  

The majority shareholder, Horyal Investments Holding Co Ltd, has expressed dissatisfaction with the Uganda Development Corporation (UDC), citing limited participation in managing the joint venture. 

In 2018, the government, through UDC, invested US$5.5 million for a 10.1 percent stake in the factory, established by Horyal Investments Holding Co Ltd.  

Since then, the government’s stake has increased to 49 percent with a direct and indirect investment of UGSH553.7 billion (US$151.1M), including contributions from the National Agricultural Advisory Services (NAADS). 

Despite these investments, Ahmed criticized UDC’s lack of involvement in managing the factory, particularly during its closure.  

However, UDC’s Director of Investments, Andrew Mugerwa, assurED that the corporation is now actively engaged in the project’s management.  

Mugerwa explained that UDC is collaborating with Horyal Investments, along with the Ministries of Finance, Works, Water, and Agriculture, to facilitate the factory’s return to full commercialization. 

Currently, the factory continues to produce electricity to maintain critical operations, consuming 200 litres of diesel daily at a cost of over UGSH800,000 (US$218.27).  

Once the irrigation system is fully functional, the factory will require an additional 14 megawatts of electricity to run the entire facility efficiently, on top of the 6 megawatts it currently generates. 

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