Africa Investment

Uganda: African Development Fund Approves $71.5 Million in Loans for Road Upgrading Project

Improved access to schools, hospitals and farms expected to benefit 1 million people in southwestern Uganda
Abidjan, Côte d’Ivoire, 3 December 2020 – The Board of the African Development Fund (ADF) has approved a loan of $71.5 million to pave sections of two roads in southwestern Uganda, a project expected to boost livelihoods, school attendance and rural connectivity.
The financing will be sourced under ADF-15, the most recent replenishment of the Fund, which is the concessional lending window of the African Development Bank Group. The loan represents roughly 86% of the project’s total costs and the government of Uganda will fund the remaining $11.9 million.
The central element of the project is to upgrade and pave 34 km of the Kabale-Lake Bunyonyi-Kabeho circuit and the Kisoro-Mgahinga Park Gates road, as well as construction of two roadside markets, farm produce holding facilities and four ferry landing sites on Lake Bunyonyi.
The funds will also underwrite the provision of two ferries with navigational aids and the provision of technical assistance to the government to strengthen road safety regulations and support implementation of inland water transport aspects of the project. The project also makes provision for relocation and compensation of those affected.
The intervention’s complementary approach – blending investment in road renewal with investment in farming and other infrastructure – aims to increase market access for farm produce, increase productivity in a rural part of the country, and strengthen social welfare.
Expected outcomes include improved tourism earnings, higher farm gate prices for commodities, increased school enrolment, and stronger hospital attendance in the project area.
The loan aligns with the government of Uganda’s third National Development Plan 2020/21-2024/25 under its Vision 2040. It is also consistent with the African Development Bank Group’s 10-year Strategy 2013-22, Pillar I of ADF-15 Strategic Priorities as well as two of the High-5s operational priorities: Feed Africa and Improve the Quality of Life for the People of Africa.
“This innovative and integrated infrastructure development project is poised to increase market development, widen business opportunities and scale up food productivity, enhancing income levels in South-western Uganda,” said Amadou Oumarou, Bank Director of Infrastructure and Urban Development.