AfDB signs US$229.5mn financing agreement for Uganda expressway project

AfDB Ugand expresswayThe African Development Bank (AfDB) and the Government of Uganda have signed a US$229.5mn financing agreement for the first phase of the Kampala-Jinja Expressway project, which is expected to cut travel time and boost trade along an important artery linking Uganda with its neighbours

The Kampala-Jinja Expressway public-private partnership (PPP) project-Phase I will improve travel flow, thereby “reducing travel time from more than three hours to under one hour” between Jinja and Kampala along the northern corridor linking Uganda to neighbors Rwanda, Burundi, Democratic Republic of Congo, South Sudan and Kenya, said Matia Kasaija, minister of finance, planning and economic development.

Minister Kasaija, who signed the accord on behalf of the government, noted that the AfDB was the second-largest multilateral donor to Uganda, contributing 20% of the country’s development assistance in the areas of roads, energy, agriculture, education, health and sanitation.

He said that the Kampala-Jinja road was a major gateway for all imports and exports into and out of Uganda and its successful implementation would spur trade volumes and economic growth in Uganda and among its neighbours.

“The public-private partnership model will bring in private sector participation and financing of a key infrastructure in Uganda and will yield a significant economic return for the country with estimated net revenue of US$2.1bn over the 30-year concession period,” said the Bank’s country manager for Uganda, Augustine Kpehe Ngafuan.

The KJE project will boost local industries, with the agreement stipulating that at least 30% of subcontracting in the project would be awarded to local companies under the Buy Uganda Build Uganda (BUBU) policy. It will create at least 1,500 direct jobs during the construction phase and 250 jobs during the operational phase, Ngafuan said.

The proposed concession period is 30 years, including an eight-year construction period. The Uganda National Roads Authority (UNRA) is the executing agency and has already commenced the procurement of a private concessionaire on a design-build-finance-operate-transfer (DBFOT) basis under the Availability Payment PPP model.

 

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