Parliament has approved the loan request from government to a tune of US$331.5M equivalent to Shs1.241Trn that will be used for expansion of electricity across the country.
The loan approval follows a motion moved in November, 2022 by the Ministry of Finance, seeking Parliamentary authorisation by Government to borrow up to SDR 237.7 million (US$ 331.5 million equivalent) and receive a grant of up to Special Drawing Rights (SDR) 198.2 million (equivalent to US$ 276.5 million) from the International Development Association of the World Bank Group to support the Electricity Access Scale-Up Project (EASP) was presented to Parliament and referred to the Committee on National Economy for consideration.
In a unanimous decision from both sides of the House, Medard Sseggona (Busiro East) who represented the Leader of Opposition, Mathias Mpuuga welcomed the loan describing it as concessional in nature because it gives government 38years repayment period and the project reflects national character because it is going to have several districts across the country.
“Ordinarily, we aren’t opposed to borrowing, we are only opposed to unguided borrowing and we are opposed to poor management of these loans. With respect to this particular loan, you notice it is national in character over basic infrastructure that we need for development,” said Sseggona.
While defending the motion, Amos Lugoloobi (State Minister for Planning) said that the project seeks to increase the proportion of the Population with access to electricity from 24 percent to 44 percent by 2027 as well as increase the share of clean energy usage for cooking from 15 to 40 percent by 2027 as well as increase number of connections made annually from the average 70,000 to 300,000 connections by 2027.
Documents before Parliament indicate that the project will involve construction of 2,900KM of medium voltage, Construction of 3,100 km of low voltage network; Installation of 115,000 off-grid solar systems; 5,000 Commercial Enterprises to acquire Solar Systems; and distribution power networks to five (5) industrial parks in Moroto, Soroti, Masaka, Kasese and Koboko.
Currently, there are 17 ongoing projects in the Energy and Mineral Development sector, with sixteen (16) under the energy development program and one under the manufacturing program, thus bringing the overall total amount of loans committed to the Energy and Mineral development sector as at June 2022 amounts to US$3.2l47bi11ion about Shs12.043Trn.
The loan approval comes at the time statistics from Bank of Uganda, indicate that by the end of July 2022, Uganda’s Public Debt had increased to Shs80.044Trn and with the approval of this loan, Uganda’s external debt exposure will increase from US$ 17.8 billion as at 2022 to US$ 78.67 billion (inclusive of the budget support loan and Uganda Digital acceleration project (UDAP) recently approved).
