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AfDB grants loan to uplift Ugandan energy sector and economy

On Wednesday, the African Development Bank (AfDB) Group Board  approved a $121 million loan and grant to assist the Ugandan Government to improve the electricity access for rural households, businesses and public institutions.

Investing in economic development

This move is expected to facilitate economic growth, improve livelihoods and access to social services in rural communities, the Bank said in a statement.

The Bank Group has earmarked $100 million and an additional €10.205 million grant, which is mobilised by the AfDB from the Sustainable Energy for All window of the EU-Africa Infrastructure Trust Fund.

With only 14% of the national population having access to modern electricity, the government has implemented various initiatives, which the Bank has listed as: its Vision 2040 to achieve an 80% electrification rate by 2040, the five-year National Development Plan targeting 30% overall access by 2019/20 and the 10-year Rural Electrification Strategy and Plan (RESP-2) targeting to increase the current electricity access in rural areas to 26% by 2022.

Uganda Rural Electricity Access Project

The Uganda Rural Electricity Access Project, which is financed by the AfDB, will include the development of 1,147 km of medium voltage and 808 km of low voltage distribution networks. It will provide last-mile connections to the grid for over 58,206 rural households, 5,320 rural business centres and 1,474 rural public institutions.

The Bank stated: “In addition, it will support the scaling-up of “inclusive and green” connections by supplying and installing ready-boards for those who cannot afford household wiring and allowing households to pay connection charges in instalments to intensify connections for more than 99,000 new customers near the existing grid in electrified rural and urban areas.

“The project financing plan also includes a component to support key sector institutions namely, the Rural Electrification Agency, in its ability to execute and monitor viable feasibility studies and social and environmental assessments, as well as that of the Electricity Regulatory Authority to conduct studies to determine appropriate tariff levels.”

Speaking after the approval, Alex Rugamba, AfDB Director of Energy, Environment and Climate Change Department said: “The development of sustainable energy infrastructure to address key constraints hindering economic transformation is central to AfDB’s work in the region.

“This project financed in partnership with the EU will advance implementation of the government-led, sector-wide approach and ongoing harmonisation process in Uganda’s energy sector to drive economic development and improve livelihoods of rural Ugandans.”