Uganda: Board Approves USD $ 125.6 Million Loan for Road Project
Tunis, 25 September 2009 - The Board of Directors of the African Development Fund (ADF), on Friday, 25 September 2009 in Tunis, approved a loan of UA 80 million, equivalent to US$ 125.6 million, to finance the Road Sector Support Project 3 (RSSP3) in Uganda.
The main objective of the project is to improve road access in the rural areas of Western Uganda covering Kiruhura, Ibanda and Kamwenge districts. The project will assist in poverty reduction. The main components of the project include civil works for upgrading to a bitumen standard, the 143-km stretch of Nyakahita-Ibanda-Kamwenge Road with 6.0 m carriageway and 1.5 m shoulders on either side. There will also be an installation of a weigh-bridge at an appropriate location to control vehicle over-load. Other components of the project consist of an HIV/AIDS mitigation programme, an Environment and Social Management Plan (ESMP), a Resettlement Action Plan, road safety, project audit, Feasibility and detailed design studies for Kayunga–Galiraya (83km) and Hoima-Butiaba-Wanseko (111 km) roads.
Estimated to be fully implemented over a five year period, the project will improve transport services with reductions in transport costs, travel times and improved road safety. It will directly enhance the livelihood of an estimated 800,000 people within the project area, where majority of the people are involved in agricultural activities, animal husbandry and trading.
The total project cost is estimated at UA 110.27 million (about US$ 173. 1 million), of which the proposed ADF loan will cover as much as 92.3% of the foreign exchange cost in addition to 5.1% of local costs while the Government of Uganda will finance UA 30.27 million (US$ 47.4 million), representing 27.4 % of the total costs, mainly in local currency (94.9%) with 7.7% in foreign costs.
The Bank Group’s strategy for Uganda draws on the Uganda Joint Assistance Strategy (UJAS), supported by Development Partners, for the period 2005 to 2009. Its objective is to articulate a harmonized response to the country’s Poverty Eradication and Action Plan (PEAP) and other development goals. More specifically, the Bank Group’s support is mainly around two pillars of the PEAP, namely, enhancing production, competitiveness and incomes, and human development. The ADF’s intervention in the road project is consistent with the Bank Group’s strategic vision for Uganda for the period 2008-2010 which emphasizes human development, pro-poor development investments in an environmentally and socially accepted manner and overall poverty reduction.
*1 UA = 1. 57 US$ as at 9 September 2009