AfDB approves USD 245 million to finance Uganda-Rwanda transport project and boosts regional trade in East Africa

22/06/2016
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On Wednesday, June 22, 2016, the African Development Bank approved USD 245 million in loans and grants to the Governments of Uganda and Rwanda to finance a transport project that will boost regional trade and decongest traffic from Kampala (Busega) city to Mpigi. Uganda and Rwanda are landlocked countries and transport infrastructure is a key factor to stimulate socio-economic activities and improve competitiveness.

In Uganda, the Bank’s USD 151 million will finance the construction of a 23.7-kilometre expressway, which will facilitate the journey between Kampala (Busega) and Mpigi on the Northern Corridor, a major trade route in the region. In Rwanda, the USD 94-million Bank loan will finance the rehabilitation of a 208-km road (Kagitumba-Kayonza-Rusumo) in eastern Rwanda. These roads are vital links, which support the regional integration objectives of the East Africa Community (EAC) and the Great Lakes Region, contributing to poverty reduction and regional integration across Uganda, Rwanda and Tanzania. The project also includes the construction of two cross-border markets at Kagitumba and Rusumo; training of women traders and entrepreneurs.

In Uganda, the existing Busega-Mpigi road is highly congested especially at Busega, handling over 26,000 vehicles per day on a two-lane road. Average vehicle travel time from Busega to Mpigi will be reduced from one hour to 20 minutes on the completion of the project. In Rwanda, the average vehicle travel time on the Kagitumba-Kayonza-Rusumo road will be reduced by 50%, from six to three hours. The road construction will be completed in 2½ years. 

The direct beneficiaries of the project are traders and transporters who use the Northern Corridor via Mirama Hills/Kagitumba and the Central Corridor, via Rusumo and the 2.14 million people living within the Busega-Mpigi and Kagitumba-Kayonza-Rusumo areas. “The project will contribute to poverty reduction, improve the quality of life of people in the area by providing socio-economic facilities. It will also contributes to agriculture development and food security; and facilitates industrialization through reduced transportation and logistics costs”, said Amadou Oumarou, Director of the AfDB’s Transport & ICT Department.

The total project cost is estimated at USD 376.5 million, co-financed by AfDB (USD 244.6 million), Japan International Cooperation Agency (USD 56.3 million), European Union (USD 22.4 million) and the Governments of Uganda and Rwanda (USD 53.2million).