(KAMPALA) – Uganda has announced plans to borrow 358 million US dollars, equivalent to about 2.54 trillion South Sudanese Pounds (SSP), from regional and private lenders to finance major infrastructure projects, including a new power grid connection with neighbouring South Sudan.
According to junior finance minister Henry Musasizi, the credit will be drawn from the African Development Fund, the Arab Bank for Development in Africa, and Standard Chartered Bank. The plan was presented in parliament this week and has been referred to a committee of lawmakers for review before it is debated and voted on by the full House.
The proposed loan will cover several projects. Key among them is the construction of a 138 kilometre high voltage transmission line linking Uganda’s grid with South Sudan, along with the expansion of two substations and the building of a new one. Other projects include a road in northwestern Uganda that will connect to the Democratic Republic of Congo, and the expansion of clean water services.
Uganda currently produces surplus power after switching on the final unit of its 1.7 billion US dollar Chinese funded Karuma hydropower dam last year. Officials in Kampala have been exploring regional markets for this extra electricity, with South Sudan singled out as a priority due to its high demand and chronic shortages.
Talks have already taken place with the Chinese engineering company Sinohydro, which has worked on several energy projects in Uganda, to implement the new power export infrastructure.
For South Sudan, which continues to suffer from widespread blackouts and limited national grid coverage, the project could provide a significant boost to both businesses and households. Access to reliable electricity has long been cited by investors as a critical barrier to growth in South Sudan’s economy, where most firms currently rely on costly diesel generators.
If completed, the interconnection will not only expand Uganda’s export earnings from electricity but also help stabilise supply in South Sudan, potentially lowering operating costs for businesses and supporting new investment.
| Details | |
|---|---|
| Loan Value | $358 million (2.54 trillion SSP) |
| Main Funders | African Development Fund, Arab Bank for Development in Africa, Standard Chartered Bank |
| Key Project | 138 km high voltage transmission line to South Sudan |
| Additional Works | Expansion of two substations and construction of a new one |
| Other Projects Financed | Road to DRC border, expansion of clean water access |
| Uganda Energy Context | Produces surplus power after $1.7 billion Karuma hydropower dam completion |
| South Sudan Energy Context | High demand, limited grid coverage, heavy reliance on diesel generators |