The palm oil processing plant on the Lake Victoria island of Bugala has commenced with operations and is expected to save Uganda $60 million a year on vegetable oil importation.

The New Vision newspaper reports the $10 million facility also generates 1.5 megawatts of electricity for the estates on the island.

Kodey Rao, managing director of Bidco, the investor in the plant, said the facility will be commissioned on 7 March by President Yoweri Museveni.

Operating at full capacity, the project will produce around 140,000 tonnes of crude palm oil and 14,000 tonnes of palm kernel oil annually.

The project is a partnership between the government, the International Fund for Agricultural Development, the World Bank and Oil Palm Uganda.

Oil Palm Uganda consists of Wilmar, a conglomerate specialised in plantation development, and Bidco, an oil processing company.