Uganda eyes Sh46 billion loan to finance key infrastructure projects
The most prominent project in the package is the Uganda-South Sudan electricity interconnection, which will allow Kampala to export surplus power and help Juba address its power shortages.
Uganda is seeking to borrow $358 million (Sh46.3 billion) from regional and private lenders to finance infrastructure projects that include a high-voltage power grid interconnection with South Sudan, new road construction and the expansion of clean water supply.
The financing will come from the African Development Fund, the Arab Bank for Development in Africa and Standard Chartered Bank.
The plan, according to Reuters, was tabled in Parliament by Junior Finance Minister Henry Musassizi on Tuesday. It was subsequently referred to a committee of ruling and opposition MPs to examine the loan's terms and feasibility.
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The full House will then debate and vote on the proposal after the committee presents its report.
The most prominent project in the package is the Uganda-South Sudan electricity interconnection, which will allow Kampala to export surplus power and help Juba address its power shortages.
Uganda currently generates more electricity than it consumes, following the commissioning of the $1.7 billion (Sh219.6 billion) Karuma Hydropower Plant in 2024. Officials see regional exports as a way to maximise returns on investments while expanding cross-border trade.
The power project includes building a 138-kilometre high-voltage line in Uganda, upgrading the Karuma and Olwiyo substations and constructing a new substation near the border. New lines and infrastructure in South Sudan will then extend the grid toward Juba.
In February 2025, South Sudan unveiled plans to strengthen its electricity infrastructure by importing power from Uganda. Supported by the African Development Bank and the European Union, the five-year initiative includes building new substations and expanding the grid to reach areas such as Juba and Nimule.
Beyond the power project, part of the loan will finance a road in northwestern Uganda that will improve transport services to the Democratic Republic of Congo, while supporting trade across the two countries. Additional capital will also be directed towards clean water projects, aimed at expanding safe water access to rural communities.
While the projects are seen as strategically important, the borrowing adds to concerns over Uganda's rising debt levels. As at December 2024, Uganda's public debt had reached Ugx106.22 trillion (Sh3.9 trillion).
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