Uganda Acquires Shs 166Bn from AFD for Mbra-Masaka Electricity Project

The government of Uganda has Friday signed a financing agreement with the French Development Agency for the upgrade of the 400 kV transmission line project between Mbarara and Masaka.

Under the agreement, the Agence Française de Développement (AFD) will provide 37.1 million Euros (Shs 166 billion) for the 130 km electricity transmission line. The project is co-financed by the German development bank (KfW) which has provide 35 million Euros.

The agreement was signed by Finance Minister, Matia Kasaija and the signed between the Government of Uganda and the AFD’ country representative, Virginie Leroy.

The financing will support a key project in the energy sector that will help evacuate power, increase power reliability and enable exports of electricity. This is in line with Uganda Vision 2040 and the National Development Plan (NDP).

Feasibility studies were completed in 2015 with finance from the European Union Infrastructure Trust Fund.

According to AFD’ country representative, Virginie Leroy: “The 37.1 M€ concessional loan from the French Development Agency is a good example of how together with KFW and with the support of the EU, AFD concretely supports Uganda in its contribution to the ‘Sustainable Energy for All’ initiative as well as to the ‘Uganda Contribution to Paris Climate Change Agreement’ .”

The Minister of Finance, Matia Kasaija said the project will give a boost in electricity supply in South Western Uganda and contribute to the interconnection between Kenya and Rwanda.

“Sustainable Development Goal 7 obligates member states to ensure access affordable, reliable, sustainable, and modern energy for all and the Uganda Vision 2040 puts the target at 80% access to modern energy by 2040, up from the access rate of 14% in 2013,” Kasaija said.

The Minister added that the project will help Uganda to implement the commitments it made at regional and international levels; to improve electricity generation and sharing among partner states through the Eastern Africa Power Pool (EAPP) in a bid to rationalize the generation and use of modern energy sources.

He gave assurance that government will fulfill its obligations under the agreement which include proper utilization of the funds.

In her remarks at the signing ceremony, French Ambassador, Stephanie Rivoal said: “The Ugandan energy sector is booming, and the national generation capacity is soon to be up-scaled. The need to develop the grid in order to evacuate electricity is therefore of paramount importance”.

“Upon completion, the project will increase power reliability in the Central and Western regions of Uganda, a good way to boost the economy and support access to energy,” she said.