Uganda: US$ 78 million ADF Loan for an Electricity Transmission Project
Tunis, 16 December 2008 – The African Development Bank (AfDB) Group has approved an African Development Fund (ADF) loan of UA 52.51 million, equivalent to US$ 78.13 million, to finance a key electricity project in Uganda. The Mbarara-Nkenda & Tororo-Lira Power Transmission Lines Project, located in west, north and eastern Uganda respectively, will expand the coverage of the national transmission grid and enable the Uganda Electricity Transmission Company Limited (UETCL) to transmit electricity from upcoming 85 MW power plants and to improve electricity access, reliability, and quality of supply to consumers in the country. The project will improve the economy’s competitiveness as well as contribute to economic growth and the achievement of the Millennium Development Goals (MDG) in the country.
The project will primarily benefit communities, towns, government services and businesses in and around the project areas in the western, northern and eastern parts of Uganda. These beneficiaries also include other energy sector institutions and companies such as the Rural Electrification Agency (REA) and Umeme.
Uganda’s energy needs are huge and electricity demand is growing at a very fast rate (7% p.a.). The proposed project will enable the evacuation of energy generated from the 50 MW thermal power plant, scheduled for commercial operation at the end of 2010, as well as the 35 MW to be generated from mini hydro power plants located in the western region. The project will improve the coverage of the national grid and contribute to increase electricity access rates.
Sufficient and stable energy supply is essential for improving the economy’s competitiveness and raising productivity in all the productive sectors. The power to be generated through the proposed transmission lines will meet the energy needs of domestic, agricultural, industrial and commercial clients.
Energy is a key sector in Uganda’s economy. It is a major component of the country’s infrastructure, the quality and coverage of which are closely linked to the attainment of important development objectives as it supports economic activities and the achievement of development outcomes in all social sectors.
The AfDB has been active in Uganda’s power sector since 1972. It has, over this period, acquired extensive knowledge of sector issues as well as wide experience in supporting major initiatives and projects aimed at meeting the country’s energy needs.
The AfDB started operations in Uganda in 1968. To date, its cumulative commitment in the country stands at US$ 1.74 billion for 105 operations.
* 1 UA = US$ 1.48797 as at 16/12/2008