6 November 2018

Uganda: AfDB Approves Loan for Kampala-Jinja Expressway Project

The African Development Bank has approved a sovereign loan of US$229.5 million to Uganda to finance phase one of the Kampala-Jinja Expressway project.

The financing, according to AfDB, will reinforce Uganda's position as a regional transit hub, supporting its ambition to propel its economy into middle-income status by 2020.

According to Uganda National Roads Authority, the Kampala Jinja Expressway forms part of the northern trade corridor from Mombasa in Kenya through to Kigali in Rwanda.

This is a strategic corridor which serves as a trade link to the sea for land-linked countries of Uganda, Rwanda and DRC.

The loan which has been approved by the Board of the African Development Bank on Wednesday, 31 October 2018, supports the Government's Vision 2040 agenda. It will co-finance, with the European Union and Agence Francaise de Developpment, $400 million which will pave the way for private sector financing of the remaining $800 million.

"The financing will support Uganda's second National Development Plan 2015-2020, which aims to strengthen the country's competitiveness for sustainable wealth creation, inclusive growth and jobs creation. Uganda's road rehabilitation plans are anchored on its 15-year National Transport Master Plan (NTMP 2008-2023), aimed at facilitating efficient movement of passengers and freight across the country to support growth objectives." A statement from the bank reads.

Total project cost is estimated at US$1.55 billion, with financing from sovereign and non- sovereign facilities. The facility will finance infrastructure development, project implementation support and community livelihoods improvement activities along the proposed 95-kilometre expressway. Over 2,000 direct and indirect jobs will be created during the construction and operational phases of the project. When completed, the Kampala-Jinja Expressway will boost national economic productivity, competitiveness, regional trade and integration. It will also alleviate congestion in and around Ugandan's capital, Kampala and reduce travel time between the country's two main economic hubs.

Kampala Jinja Expressway (KJE) is one of five expressway projects identified in the Vision 2040 and National Development Plan II as critical for the economic development of Uganda. In line with this aspiration, KJE was designed to an expressway standard in line with Government objectives and consistent with the country's expressway network. The expressways are being constructed to the same standard and together they will form a network that will enable quick mobility of vehicles within and around Kampala and surrounding areas.

Scheduled to be managed over the next 30 years (including an five-year construction period) under a concession-based Public Private Partnership (PPP) arrangement, the project comprises of two phases: the Kampala-Jinja Mainline Expressway and Kampala Southern Urban Bypass (KSB), collectively known as the Kampala-Jinja Expressway PPP Project.

The project also has a human capital development component, focused on skills development for Uganda and East Africa. By 2028, over 200 PPP specialists (gender inclusive) are expected to have been trained to work in the region's transport sector, under a graduate / professional work placement scheme

The Board applauded the innovative financing structure which should serve as model to be replicated across the continent. The Bank's leadership in transport infrastructure development, which is attracting interest and alliances with several development partners, was also acknowledged by the Board .

Uganda's road network is the country's predominant mode of transport and a key enabler of her trade and economic activities within the East African Community. The Kampala-Jinja corridor has experienced accelerated development over the last 20 years, and currently experiences traffic overload, registering over 1,000 vehicles per hour per lane, with consistent breakdown of traffic flows, according to a 2017 study conducted by the Uganda National Roads Authority.

The expressway is located along Uganda's Northern Corridor, a strategic route within the EAC, linking Uganda, Rwanda, Burundi, Democratic Republic of Congo (DRC) and South Sudan with Kenya's Mombasa maritime port. It is easily the most important route on the national road network, taking 30 percent of international traffic to Burundi, 60 percent to Rwanda and almost 100 percent to Uganda. It also carries over 90 percent of Uganda's imports and exports.

The project aligns with the Bank's Ten-Year Strategy (2013-2022) and Uganda Country Strategy Paper 2017-2021, under its "Infrastructure Development for Industrialization" pillar. It is consistent with three of the Bank's High 5 priorities: "Integrate Africa", "Industrialize Africa" and "Improve the quality of life of the people of Africa."

The African Development Bank is one of the leading Development Partners in the country's transport sector, coordinated by the Uganda Transport Sector Development Partners Group (UTSDPG).

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