African Development Fund Approves $71.5m Loan for Roads in Uganda

The Fund explains that the central element of the project is to upgrade and pave 34km of the Kabale-Lake Bunyonyi-Kabeho circuit and the Kisoro-Mgahinga Park Gates road, as well as construct two roadside markets, farm produce holding facilities, and four ferry landing sites on Lake Bunyonyi.

The African Development Fund, which is a part of the African Development Bank Group has approved a $71.5 million loan for the improvement of roads in one of Uganda’s high-end tourist destinations in the south-western districts of Kabale and Kisoro.

The African Development Fund (ADF) Board said in a statement that the loan was approved on December 3, to pave sections of two roads which will improve road transport in the area as well as boost

The money will finance the upgrading of roads and ease movement and connectivity to the popular tourist destinations Lake Bunyonyi and Mgahinga National Park.

Lake Bunyonyi is the second deepest lake in Africa, and also known for luxury island holiday resorts, while Mgahinga Park is famous for mountain gorillas and golden monkeys.

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The Fund explains that the central element of the project is to upgrade and pave 34km of the Kabale-Lake Bunyonyi-Kabeho circuit and the Kisoro-Mgahinga Park Gates road, as well as construct two roadside markets, farm produce holding facilities, and four ferry landing sites on Lake Bunyonyi.

AfDB’s Bank Director of Infrastructure and Urban Development Amadou Oumarou said “This innovative and integrated infrastructure development project is poised to increase market development, widen business opportunities and scale up food productivity, enhancing income levels in South-western Uganda.”

The financing will be sourced under ADF-15, the most recent replenishment of the Fund, which is the concessional lending window of the African Development Bank Group.

The loan represents roughly 86 percent of the project’s total costs and the government of Uganda will fund the remaining $11.9 million.

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The funds will also underwrite the provision of two ferries with navigational aids and the provision of technical assistance to the government to strengthen road safety regulations and support implementation of inland water transport aspects of the project.

The project also makes provision for relocation and compensation of those affected.

Through this approach, blending investment in road renewal with investment in farming and other infrastructure, ADF aims to increase market access for farm produce, increase productivity in a rural part of the country, and strengthen social welfare.

Expected outcomes include improved tourism earnings, higher farm gate prices for commodities, increased school enrolment, and stronger hospital attendance in the project area.

The loan aligns with the government of Uganda’s third National Development Plan 2020/21-2024/25 under its Vision 2040. It is also consistent with the AfDB Group’s 10-year strategy 2013-22, Pillar I of ADF-15 strategic priorities as well as two of the High-5s operational priorities, namely, feed Africa and improve the quality of life for the people of continent.

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