Govt signs sh2.7 trillion infrastructure financing deal with Standard Chartered

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The Minister of Finance, Planning and Economic Development, Matia Kasaija, on behalf of the Government of Uganda, on Friday presided over the signing ceremony of three project financing agreements with Standard Chartered Bank, valued at over sh2.7 trillion.

The funds will finance three key government projects.

At the signing ceremony, which took place at the Finance Ministry headquarters in Kampala, Kasaija signed on behalf of the Government, while Standard Chartered Bank, Uganda CEO Sanjay Rughani signed on behalf of the bank.

The signing was witnessed by the Minister of Energy and Mineral Development, Dr Ruth Nankabirwa, as well as Sam Cheptoris, the Minister of Water and Environment.

Also, in attendance were: Dr Ramathan Ggoobi, Permanent Secretary and Secretary to the Treasury (PSST). Other dignitaries who witnessed the signing include Maria Hakansson, Swedish Ambassador to Uganda, as well as Permanent Secretaries from all the implementing ministries.

Dalu Ajene, the CEO and Head of Coverage at Standard Chartered Africa, Sujithav Sarangi – Executive Director, Development and Agency Finance at Standard Chartered, as well as Maria Kiwanuka, Board Chair, Standard Chartered Uganda, Prof Ephraim Kamuntu and three contractors, namely China Harbour Engineering Company Limited, Kalpataru Power Transmission Sweden AB and Afcons Infrastructure, also attended.

According to Kasaija, Standard Chartered (StanChart) Uganda will arrange and co-fund three projects as follows.

The Tororo-Karuma transmission line is one of the three projects. The sh1.4 trillion (EUR 342.5 million) loan from StanChart will finance the 400KV Karuma-Tororo double circuit power line and Ntinda substation, enhancing transmission from the Karuma hydropower Plant.

This investment will provide reliable electricity for industries and urban areas, creating jobs and positioning Uganda as an East African energy hub.

The financing has been arranged with the support of Swedish Export Credit Agency, EKN (Exportkreditnamnden) and Swedish Export Credit Corporation (SEK), which has made it possible to achieve competitive pricing and long tenors.

This marks the first transaction for EKN in Uganda.

The second project is a Strategic Towns Water Project: A separate sh754.5 billion loan from Standard Chartered will finance Phase II of the Strategic Towns Water Supply and Sanitation Project, covering Nakasongola District and other clusters like Kamuli, Mayuge, Bugweri and Alebtong districts.

It aims to serve 740,000 people by 2020 through the provision of water treatment plants, sanitation facilities, and boosting health and productivity. The Bank has arranged this financing with the support of the Chinese Export Credit Agency, Sinosure.

The third is the critical oil roads project: Standard Chartered will also provide a sh486 billion loan facility. This will help finance the construction of the Karugutu-Ntoroko 56.5km road. And also cover Rwebisengo Link (8.2km) as well as Ntoroko Town Roads (3.3km).

The road upgrades will support infrastructure development in the Albertine region, a key trade route linking Uganda to the Democratic Republic of Congo.

The Bank arranged this financing with support from the Islamic Corporation for the Insurance of Investment and Export Credit (ICEIC), which is part of the Islamic Development Bank Group.

Kasaija said these projects “will go a long way in supporting Uganda’s development trajectory by supporting evacuation of power from Karuma Hydro power plant to identified load centres like Tororo Industrial Park and facilitate regional power trade.”

The finance minister added that “This will help to avoid losses from unutilised power/deemed energy. The water project will definitely provide clean water to the project target areas and therefore improve people’s well-being.”

According to Kasaija, the road project will support the government initiatives to develop the oil sector and enhance tourism potential in the areas around Lake Albert.

The three projects are in line with the government’s strategy to grow the economy tenfold from $53 billion to $500 billion by 2040.

Dalu Ajene, the CEO and Head of Coverage, Africa at Standard Chartered Bank, while witnessing the signing of the MoU, said they were “pleased to once again leverage our on-the-ground presence and trusted partnership with the Government of Uganda to continue to support its ambitions and help drive Uganda’s tenfold growth strategy forward.”

According to Ajene, this partnership therefore demonstrates how governments and international financial institutions can work together to structure complex, long-term financing and deliver projects with lasting economic and social impact.

Sanjay Rughani, the CEO and Head of Coverage at Stanchart Uganda, said they understand that “water security, roads and efficient power transmission enhance resilience and promote inclusive growth. As a bank, we are committed to financing economically viable infrastructure.”