Uganda will start the stage of developing its first oil refinery in 2012. The refinery will begin by meeting the local demand of up to 25,000 barrels per day (bpd) prior to increasing up to 200,000 bpd, according to a Uganda official on Tuesday.

The east Africa’s third biggest economy is already keen on avoiding any pitfalls that have already caused problems on other oil producers in the sub-Saharan Africa. These pitfalls made them decide against exporting crude oil.

The Uganda government tells they hope refining capacity will ensure more earnings, give more employment, and help the country achieve a middle-income status.

The oil refinery is said to compete with other planned plantation refineries in South Africa, as well as Angola, which is considered as one of the largest in the region.

Fred Kabagame Kaliisa, the permanent secretary at the mines and energy ministries said that they will focus the entire duration next year into serious planning for development, which will include taking a land and meeting with financiers and potential developers to deal with financing agreements.

According to Kabagame, the ministry with Uganda’s cabinet were conferring about a feasibility study that was done by Foster Wheeler, and that the refinery will be based in the Hoima, west of Uganda.

On Tuesday, Kabagame also said that 28 companies also expressed their interests in building the proposed $900 billion Karuma hydropower dam that will produce about 700 megawatts based on Kabagame’s statement.

The winner will be awarded in August as they wish to see someone start the work by September or October.