Uganda secures $358 million loan for infrastructure modernization, eyes regional power export to South Sudan
The Ugandan government has already initiated negotiations with the prominent Chinese construction firm Sinohydro to develop this vital power interconnector, which is expected to considerably stimulate cross-border electricity trade and further integrate East Africa's energy markets.
Uganda is set to borrow $358 million from a consortium of regional and international financial institutions to finance critical infrastructure projects, with a significant portion earmarked for an electricity transmission line to neighboring South Sudan.
Minister of Finance Henry Musasizi recently announced the plans before Parliament, emphasizing the government’s commitment to bolstering regional integration and leveraging its growing energy surplus.
Musasizi, who presented the comprehensive loan request to Parliament, confirmed that the funds would be sourced from the African Development Fund (ADF), the concessional lending window of the African Development Bank Group; the Arab Bank for Economic Development in Africa (BADEA); and the British bank Standard Chartered Bank.
The substantial investment aims to address various development priorities. Beyond the primary focus on energy infrastructure, the funds will also finance a crucial section of the road connecting northwestern Uganda to the Democratic Republic of Congo (DRC) and expand access to potable water across several communities.
This strategic infrastructure push comes on the heels of Uganda achieving a significant electricity surplus. In September 2024, the nation commissioned the 600-megawatt Karuma hydroelectric power station on the Nile, a project 85% financed by China.
This monumental facility has not only enabled Uganda to meet its internal demand but has also positioned it to export surplus power to neighboring countries such as South Sudan, Tanzania, and Rwanda.
Central to the regional integration agenda is the planned construction of a high-voltage electricity transmission line that will link Olwiyo town in northern Uganda to Juba, the capital of South Sudan.
This ambitious energy project also includes the construction of a new substation in Bibia (Uganda), the modernization of existing substations in Karuma and Olwiyo, and the establishment of a new substation in Gumbo (South Sudan).
The Ugandan government has already initiated negotiations with the prominent Chinese construction firm Sinohydro to develop this vital power interconnector, which is expected to considerably stimulate cross-border electricity trade and further integrate East Africa’s energy markets.
The project underscores Uganda’s pivot towards becoming a key energy exporter in the region, fostering economic growth and cooperation.
