Charles Kazooba
14 September 2006
Kampala — The three member states of the East African Community and Rwanda have applied for a US $ 280m loan (approx. Frw 162.4bn) from World Bank to finance a railway line that will link Rwanda to East Africa.
Dr. Ezra Suruma, Uganda's Minister for Finance and Economic Planning, wrote to Parliament seeking approval for the government to secure a loan of US $ 41 million as partial funding of the project.
The project is intended to improve the international competitiveness of the region, decrease high transport costs estimated at more than 35% of the value of exports and transit delays at entry and exit boarder points.
Kenya and Uganda railway networks have jointly entered into a 25-year concession agreement with Rift Valley Railways, a South African company. Under the agreement, the respective governments are required to revamp the existing railway infrastructure and assets.
"The Government of Uganda has already negotiated a credit facility of US $ 26.4 million and a Partial Risk Guarantee Facility of US $ 15m from the International Development Association of World Bank. The funds are for the East African Trade and Transport Facilitation project," Suruma's letter seeking Parliament's approval for the credit, partly reads.
The project will boost support to the East African Community customs union implementation and will also enhance the management mechanism to connect Dar-es-Salaam port to the Great Lakes Region.
Under the agreement, Kenya will incur indicative costs of US $150.17m, Rwanda US$28.5m, Tanzania US $ 47.9m and Uganda US $39.3m.
The World Bank financing for Kenya would be US $ 120.62m, Rwanda US $ 15m, Tanzania US $ 37m and Uganda US $ 26.4m.
Al hajji Ibrahim Kadunabi, the chairman of the Parliamentary Committee on the Economy told The New Times that members of his committee would first consult all stakeholders before asking Parliament to approve the loan facility.
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