The Lusalira to Sembabule road project is expected to link the national road network to the west of the country

Citi has announced a €126 million (about Shs497bn) loan to the government to fund the design and build of the Lusalira to Sembabule road project in Uganda.

Citi acted as sole coordinating Mandated Lead Arranger and a lender while the financing was supported by African Trade and Investment Development Insurance (ATIDI) and Development Bank of Southern Africa (DBSA).

Banks in the syndicate include Absa Bank (Mauritius) Limited.

The Lusalira to Sembabule road project is expected to link the national road network to the west of the country, playing a significant role in its socio-economic development, in addition to its integration into the East African region as part of Uganda’s broader infrastructure development efforts.

Unveiled on Friday at the Ministry of Finance, the project is anticipated to boost Uganda and its neighbors’ ambition to create a well-connected regional economy by reducing trade barriers, lowering transport costs and encouraging the free movement of people and goods across borders.

Henry Musasizi, the minister of State for Finance Planning and Economic Development, highlighted that the road project will bring various benefits, including the stimulation of local economic activities.

“It will provide an alternative route connecting the Northern corridor routes of Kampala-Masaka-mbarara, and Kampala-Mubende-Fort Port route, thereby easing connectivity of the Central Region to the Albertine region,” Musasizi said.

He added, “It will improve access to rural, economically productive areas and thereby contribute to socio-economic development and poverty reduction, and stimulate and support local economic activities by reducing transport costs and travel time around the existing gravel road.”

Speaking at the event, Citi Middle East and Africa Cluster, Ms Ebru Pakcan, expressed their immense pride in supporting crucial infrastructure development in Uganda in this, considering the far-reaching impact of infrastructure development of this kind.

“The significance of strategic partnerships such as this, in making large-scale infrastructure projects possible is critical if we want to help to enhance and prioritize Uganda’s connectivity the East African region,” Pakcan said.

“The significance of the impact of the Lusalira to Sembabule Road Project cannot be overstated.

Considering that the 97-kilometre road upgrade will link the national road network to the west of the country, we expect that this transformational project to materially improve accessibility and mobility for local communities.” Pakcan added.

The Shs497bn 10-year loan facility will be used to upgrade the 97-kilomere road project that passes through key agricultural areas in Uganda and will enable the transport of farmer produce to urban markets, stimulating rural economic growth.

Further, access to essential social services such as healthcare and education is anticipated to increase as the project rolls out in areas with previously impassable roads.

“The DBSA is pleased to form part of the financing of the Lusalira to Sembabule road project which is a key transport infrastructure project unlocking significant developmental dividends for Uganda. DBSA remains a keen financing partner for infrastructure development across sub-Saharan Africa.” said Seison Reddy, DBSA’s Head of Transacting for SA& International.

“As this is the first project to befunded by the DBSA in Uganda, the Bank is looking forward to working with the people of Uganda, on both public and private sector infrastructure projects towards achieving the country’s socio-economic developmental objectives” added Simphiwe Jantjies, DBSA’s Head of Origination & Coverage-East, Central and West Africa.

ATIDI’s CEO, Manuel Moses conmmented, “We are proud to partner with Citi and DBSA to support the Government of Uganda with this critical infrastructure project.”

The Minister of Works and Transport, Gen Katumba Wamala commended the Ministry of Finance for recognizing the project, stating that it will not only aid in infrastructure development but also improve cross-border movement.

Wamala emphasized that his ministry is focused on delivering highly secure infrastructure systems in the country, and this project aligns with that objective.

“It’s a project which apart from enabling the movement of goods and services within, it also has a bearing on the oil project, because some of the pipeline going down south is going to be passing around this line, and it will facilitate the movement and location of the pipe,”

“So on behalf of the ministry, I want to promise that we’re going to have a good ride with Technovia hopefully, so that we have this project delivered on time, quality, and also value for money, so we want to make that commitment that the funding which is coming will be properly utilized.” he added.