Uganda and Rwanda have signed a joint agreement in Kampala to build an oil pipeline that connects their capitals.

The pipeline had originally been planned to carry oil from Kenya to Kampala but will now extend to Kigali.

Tamoil East Africa, a Libyan state-owned company, is a partner in the public-private partnership venture.

The countries have hailed the pipeline project and say it will save roads from destruction by heavy petrol trucks and make petroleum products cheaper.

Among the dignitaries present at the signing were Libyan leader Muammar Gaddafi, President Mwai Kibaki of Kenya, Pierre Nkurunziza of Burundi and Abdullahi Yusuf of Somalia.