The World Bank and the government of Uganda on Monday signed an agreement where the country would receive Shs 522bn in credit to support oil-related infrastructure projects in the Albertine graben.
Last month, parliament gave a green light to the executive to borrow the money. Under the loan agreement, the World Bank will provide $145m, approximately Shs 522bn, while the government of Uganda will provide $8m, approximately Shs 28bn, in counterpart funding. Therefore, the total project cost is $153 million, which is approximately Shs 550bn.
The five-year project is expected to benefit nearly three million people, directly and indirectly. It will finance the construction of the Kyenjojo-Kagadi-Kabwoya road, markets, and support skills development in the Albertine region of Uganda, a region undergoing rapid growth and transformation due to the discovery of oil.
Matia Kasaijja, the minister of Finance, Planning and Economic Development, signed the agreement on behalf of Uganda, with Christina Malmberg Calvo, the World Bank country manager for Uganda.
“This project will benefit the people of the Albertine region and beyond, and has been prepared in close partnership with the Government of Uganda,” said Calvo.
“It complements broader programs of support to local government, transport and skills, as well as the development of key productive sectors of the economy.”
The construction of the 238 km Kyenjojo-Hoima-Masindi-Kigumba road is expected to open up the oil-rich Albertine area to the rest of the world. This will connect the districts of Kyenjojo, Kibaale, Hoima, Masindi, and Kiryandongo in Western Uganda.
The road is expected to significantly reduce travel times in the region, induce local economic development and provide better access to markets and social services in the region.
In addition to the road, the project is expect to train more students in oil-related courses through support to Uganda Petroleum Institute Kigumba (UPIK), Uganda Technical College Kichwamba and also construct another oil institute in Nwoya district to equip Ugandans with skills needed for the industry.
This aspect of the project will modernize the facilities and curriculum, and improve the governance of these institutions. It will also include a program to provide bursaries to approximately 600 students to develop skills that might allow them to find employment in the region, including in agro-processing, construction, tourism and nursing.
“Care will be taken to ensure that people in the Albertine region will benefit, and also be trained in construction, agro-processing, tourism and nursing,” Malmberg Calvo said.
The project will also support local development in the region by financing small-scale productive infrastructure in Buliisa and Hoima districts, as well as the upgrading of rural roads to all season roads. This will benefit the rural population by providing them with better access to markets and services.
There will be better planning of towns undergoing development pressure in the region, which will be supported with funds so that the local authorities can manage the impact of population growth.