South Korea’s EXIM Bank has finalised plans to extend a $500 million (Shs1.9 Trillion) loan deal to Uganda for infrastructure development, according to a statement from the ministry shared on X.
While specifics about the infrastructure projects to be funded were not disclosed, Uganda typically borrows for developments in roads and energy.
This new credit injection is expected to exacerbate Uganda’s existing debt challenges, a concern that led Moody’s to downgrade the country’s rating recently, citing issues with “diminished debt affordability.”
As of December 31, Uganda’s public debt reached $24.6 billion, largely driven by investments in infrastructure.
The agreement was formalised during the Korea-Africa summit in Seoul, with Uganda’s finance minister, Matia Kasaija, and South Korea’s Minister of Foreign Affairs, Cho Tae-Yul, signing on the sidelines of the event.