26 August 2014

Uganda: Barclays Ready to Fund Uganda's Infrastructure

Barclays group has said it has piles of cash to finance some of the biggest infrastructural projects in Uganda.

At a meeting at Kampala Serena hotel with the minister of Finance, Maria Kiwanuka, the bank officials presented cases of projects in Kenya, Ghana, Ethiopia and South Africa, which they had financed.

Rajih Shah, the head of Barclays' East Africa Investments, said: "We are open to fund government projects. In Kenya, when they decided to issue a Eurobond, we were so much involved. We were their lead arrangers [technical advisers]," Shah said.

"Being involved does not mean just providing money only; we can do other things including advisory services."

Earlier this year, Kenya issued a sovereign bond, where it managed to raise $2bn from the international markets. It used the money to pay off some debts and fund infrastructural projects. Shah said there was growing appetite among investors for investments in the East African region, and that they want to be at the forefront of striking some of the biggest deals in the region.

During the construction of the 250MW Bujagali dam, commissioned two years ago, Barclays played an advisory role, according to the bank officials. Michael Kaddu, the head of corporate affairs at Barclays Uganda, told reporters that when it comes to financing huge projects, Barclays operates as a group.

"We now come as a group. In the past, government would only look at us as Barclays Uganda."

That could also explain how banks in Uganda do not have the financial muscle to fund major projects in the country. When power distributor Umeme sought a loan of $190m, it took three institutions: Standard Chartered bank, Stanbic Uganda, and the World Bank's financing arm, the IFC, to raise it.

As financiers target projects in East Africa, Kiwanuka said the country will be looking at the best rates and conditions.

"We need the money for the income-generating activities - power stations, ICT projects where there are income streams. [We] need the very best terms possible," said Kiwanuka.

"Our role is to mobilise and maximize resources and allocate them efficiently," she added.

Kiwanuka said this year's budget "sought to open more books and encourage those in the informal sector to come into the formal sector".

In the 2014/15 budget, along with other tax measures, government raised the presumptive tax to three per cent from one per cent for the revenues informal businesses make. Kiwanuka said government wanted to widen the tax base by making sure those who could pay taxes actually did so.

Recently, Kiwanuka said government was wooing the Exim bank of India to help provide funds for the development of Namanve industrial park. China, on the other hand, has become the country's biggest financier of government projects.


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