How finance ministry plans to support unlocking of private capital for local government projects

The Ministry of Finance, Planning and Economic Development is set to support local governments to develop their proposed Public-Private Partnership (PPP) projects to bankability, as government seeks to unlock private capital for local infrastructure and services.

Permanent Secretary and Secretary to the Treasury (PSST) Ramathan Ggoobi said the Ministry would work to secure funding for feasibility studies and other preparatory work needed to turn promising local government proposals into viable investment projects.

Ggoobi made the commitment during the 43rd PPP Committee meeting, where local governments and public institutions presented a range of conceptualised projects under the PPP framework.

“I am impressed that local governments can come up with these projects. They look well informed and have potential to generate revenue for local governments,” Ggoobi said.

He said the Ministry would support feasibility studies to help the projects progress to the bankability stage and ultimately implementation.

“These are good projects that fit into our overall Tenfold Growth Strategy and the National Development Plan,” Ggoobi said.

Projects target local revenue and services

The proposals presented at the meeting covered sectors including education, waste management, markets, commercial facilities, sports infrastructure and staff accommodation.

Among the projects was a Shs50 billion student accommodation project by Muni University, which is expected to provide 2,000 beds -1,000 for male students and 1,000 for female students.

The university has identified more than 3.2 hectares of titled land for the proposed development.

Iganga Municipal Council presented a Shs12 billion waste processing plant proposed for Buluuza in Nakigo Subcounty. The facility is expected to support waste collection, materials recovery, recycling, composting and re-manufacturing.

Kyotera District Local Government presented a proposal to redevelop the central market under a Build-Operate-Transfer (BOT) model.

Bushenyi-Ishaka Municipality, meanwhile, presented a Shs1.8 billion project to construct 66 lock-up shops around Ishaka Taxi Park under a Build-Own-Operate-Transfer (BOOT) arrangement.

The projects are intended to mobilise private-sector capital while expanding local services, creating jobs and establishing sustainable revenue streams for local governments.

Feasibility studies key to bankability

Ggoobi cautioned that feasibility studies and proper project preparation would be critical in determining whether the proposals are commercially and technically viable.

He said the studies would help establish the bankability of the projects, guide investment decisions and strengthen their long-term sustainability.

The focus on project preparation comes as government seeks to increase the use of PPPs to finance infrastructure without placing the entire investment burden on the public budget.

Beyond the 11 projects presented, PPP Executive Director Jim Mugunga outlined ongoing efforts to strengthen implementation of PPPs in Uganda.

Mugunga said clearer guidelines, increased awareness and technical support were beginning to produce results, but inadequate funding for feasibility studies remained one of the major constraints affecting project preparation.

He also cited limited resources under the Project Preparation Facility and the effects of rationalisation among the challenges slowing the development of PPP projects.

Ministry considers stronger project preparation funding

To address the constraints, the PPP Unit has proposed increasing resources for project preparation, ring-fencing priority projects for faster delivery and operationalising the Project Development Facilitation Fund.

The proposed measures are aimed at ensuring that projects are adequately prepared before being taken to private investors, reducing the risk of poorly developed proposals and improving the prospects of successful PPP transactions.

For local governments, the approach could provide a pathway to transform public land and infrastructure needs into commercially viable projects capable of attracting private investment while generating additional resources for service delivery.

The Finance Ministry’s commitment therefore places project preparation at the centre of the PPP strategy, with feasibility studies expected to determine which of the proposed investments can progress from conceptualisation to bankable projects and eventual delivery.