Cabinet Approves $71m Loan Request from World Bank

Cabinet has approved a loan request by the Ministry of Finance, cheap amounting to $71m from the World Bank to finance the grid expansion and reinforcement project which provides for the Road map to increase power access to 26% by 2022.

The loan will finance a series of investments in power distribution and off-grid solutions required to achieve the rural electrification 2013-2022 strategy.

Among the districts that will benefit from the project include Gulu, adiposity Lira, Nebbi, Arua, Kole, Oyam and Nwoya.

The request was passed during a Cabinet sitting at parliament building on Wednesday August 3rd.

During the same meeting, ministers deferred a loan also presented by the Ministry of Finance on refugee hosting areas support.

The loan, also from the World Bank  was meant to finance and support  the development response to displacement impacts project particularly targeting refugee hosting districts and communities.

While cabinet members appreciated the problem refugee hosting communities face, they noted the need for;  the loan to be comprehensive and cover all  refugee hosting areas of the country and a policy on how government can sustainably support refugee hosting communities with or without a loan.

It is expected to be brought back to cabinet after wider consultations have been carried out on the areas cabinet raised.


On the issue of the plight of Ugandan exporters to South Sudan market that suffered non-payment on account of the instability there, ministries of finance and foreign affairs have been directed to establish with the government of South Sudan modalities for repatriation of proceeds of Ugandan companies held in commercial banks and to also pursue Government of South Sudan to expeditiously form a joint cooperation commission to arbitrate the pending claims of Ugandans against South Sudan individuals.

A cabinet subcommittee comprising the Attorney General, Minister of Trade and  Minister of Finance has been tasked to oversee the whole process of negotiations of the modalities with the government of South Sudan.

Also approved by Cabinet at the sitting was consideration and approval of a request from the minister of energy to allow her issue three petroleum production licenses to Total E&P UGANDA B.V, over discoveries in exploration area 1 of the albertine graben, Ngiri, Jobi-Rii and Gunya to be operated by total E&P Uganda B.V.

The production licenses to be issued have a duration of 25years and can be renewed for an additional 5 years as provided for in the Production sharing agreement (PSA).

The licenses also provide  that where there are oil fields which extend across boundaries of license areas,  it’s agreed that these oil fields will be developed as one unit.

The final investment decision is planned to be taken in 18 months after issuance of the production licenses and first oil is expected in the financial year 2019/2020.

The Petroleum Authority of Uganda will however regulate the licensed companies while the National Oil Company will participate in all licenses to take care of government’s commercial interests.

Cabinet, in furtherance of the resolutions of the recently concluded kyankwanzi retreat that termed this Tenure of government “Kisanja Hakuna Mchezo”, resolved that any future borrowing/Loans should never finance components of administration and capacity as these are always catered for in Ministries’ domestic budgets.

“Loan amounts procured should only go to finance substantive activities of the loan objectives.”

“Loan beneficiary entities and ministry  of finance -the contracting entity , should never procure or sign off any loan before all the preparatory activities are in place to avoid delayed implementation that results into financial penalties on un-utilized  loans.”

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