The African Development Bank Group President Donald Kaberuka last week made a maiden visit to Uganda since assuming office. He spoke to Business Power's Fredrick Masiga about his visit and some of the projects AfDB funds in the country. Excerpts:

What is the purpose of this visit to Uganda?

Uganda is a major client of the bank it is among the top three of AfDB resources.

We have a very large portfolio here almost $500 million, 15 projects are going on now as we speak.

We provide budget support to the government, so it is quite normal that I am here to discuss with the authorities of the performance of the economy and our portfolio and determine the priorities from the view point of different stakeholders.

Secondly, since I joined the bank we have significantly decentralised the bank with 23 offices so this is part of my field visit to determine the effectiveness of these offices.

I will be visiting two projects, a water project in Mpigi and Bujagali hydro power in which we are the second largest financier both in lending to the private company building the dam and to the government for building the transmission lines.

The Bujagali project has attracted opposition from some onmentalists. Are you aware of any reluctance from donors to proceed with the project?

We approved this loan to this private company and also approved funding for the transmission lines and there is no hesitation from our part at all.

What is true is that we as a bank have received a petition from a group concerned with the environment.

We have a mechanism of handling those things, and it is working quite well and I have not seen anything that indicates that we shall not disburse this project in my judgment and I think the project is on track.

Are you optimistic the Bujagali project will be up and running come 2011?

I am confident that there should be no good reason for time overlap but I would expect that they overcome every challenge they find on the ground.

This project is important for Uganda and East Africa and for the kind of the interconnection project. It is an example of a good public/private sector partnership.

When the bank considers lending to member countries, how much is good governance an issue?

We have a mechanism to assess a country's performance which includes governance.

We consider governance so important. It has got significant weighting in the process. If there is no good governance the chances are our operations will no succeed so we encourage government to make pledges on various aspects.

It is a major item in our assessment of whether we should lend. It has to include the management of corruption because corruption is a symptom of weak systems. We observe carefully and determine if there is political will to fight corruption.

Energy has always been a critical issue in Africa and in the last two years it has only gotten worse in East Africa. Has the bank considered a continental grid network to help countries support each other?

That is one of the plans we have at the bank. It is not possible for everyone to generate all the energy they need.

We feel that many of our countries can achieve their energy security needs by these programmes of interconnectivity. So we are promoting power pool projects in different parts of Africa.

We are identifying key investments and in accordance with the plan that was agreed on in the Nepads we are very keen to push for the Bujagali.

What do you think African countries must be focusing on now to take the recent growths to a new level?

Uganda like many African countries has reached a point where infrastructure is becoming a constraint.

It will be very difficult for many of our countries to maintain the current growth of 6 or 7 per cent unless we make a leap forwards in terms of energy and bringing down the cost of business, attract investments and we must permit the economies to continue expanding.

At independence the limited infrastructure could carry the needs of the economy but today it is extremely important try to close the infrastructure gap.

Then secondly, it is not simply about building bridges and roads it is ensuring that the institutions function and governance solutions continue to be robust.

For the last five years, African economies have done quite well.

This is the first time in 30 years where African economies have been growing every year including Uganda.

We are still a long way to fight poverty but to be able to attract investments is to continue closing the infrastructure gap and making the institutions work.