Parliament Approves Shs912 Billion Loan for Busoga Road Upgrade

Lawmakers have given their nod to a substantial loan package, estimated at Shs912 billion (approximately €207.75 million), aimed at bolstering infrastructure in the Busoga sub-region. The funds will primarily be used to upgrade the crucial 127-kilometer Jinja-Mbulamuti-Kamuli-Bukungu road. Additionally, the package includes funding for 10 kilometers of urban road improvements within Jinja City.

The loan is set to be sourced from Citi Bank and other international financial institutions. Beyond the road construction itself, the financing will encompass land acquisition and compensation, project supervision, and a €17.47 million premium for African Trade & Investment Development Insurance (ATIDI).

Minister of State for Finance, Henry Musasizi, defended the borrowing, asserting that the terms offered by Citi Bank were the most favorable available in the current market for a project of this scale. He highlighted that these terms were thoroughly assessed against commercial alternatives.

The government anticipates that this road upgrade will be a catalyst for economic development in Busoga, creating a vital alternative transport artery connecting northern and southern Uganda. Improved road connectivity is expected to significantly benefit farmers, fishing communities along Lake Kyoga, and traders by enhancing their access to markets, healthcare, and educational facilities.

Technical evaluations presented to Parliament indicate a strong economic justification for the project, with an Economic Internal Rate of Return projected at 16.7%, surpassing the benchmark of 11%. The government has also assured that this borrowing is integrated into the national debt sustainability framework and upcoming budget preparations.

Construction is slated to commence once the loan agreements with the lending institutions are finalized.

Source: Nile Post