Parliament Approves $ 135m Loan for Energy Projects

1667 Views Kampala, Uganda

In short
Parliament has okayed government to borrow about 135 million dollars for the development of the energy sector through construction of transmission lines and enhancement of rural electrification.

Parliament has Okayed government to borrow about 135 million dollars for the development of the energy sector through construction of transmission lines and enhancement of rural electrification.

The loans which will be obtained from four financial agencies were approved after the committee on national economy scrutinized the loan requests and recommended that parliament approves the loans for the fast development of the energy sector.

The loans were requested for early this year by state minister for finance in charge of privatization Aston Kajara and the speaker had directed the committee on national economy in liaison with the committee on natural resources to review the requests and report back to the house.

In the reports, the committee noted that the country is in dire need of electricity and that although government has prioritized the implementation of electricity generation projects, the projects are moving at a slow pace.

in their reports presented by committee chairperson Stephen Mukitale Biraahwa, the committee recommended that the ministry of energy and the Uganda Electricity Transmission company limited be availed with the required funds to accelerate the development process of the projects.

The committee said that due to inadequate and inconsistent appropriation of funds to the sector especially to the rural electrification programme, government might not achieve its target of electricity for all by 2035.

The members recommended that government commits adequate funds to support the rural electrification programme to give confidence to development partners about its seriousness on rural electrification.

The MPs further observed that transmission lines have not been developed at the same rate with the generation projects and power generated has not been fully evacuated and connected onto the national grid.

The MPs also recommended that plans for evacuating power from these plants should be prepared in advance and implemented in time to ensure that the available power is fully utilized.

The loans will be acquired from the French Agency for Development (AFD)-23 million dollars, Kreditanstalt Fur Wiederautbau (KFW) - 15 million Euros, International Development Association (IDA) - 12 million dollars and the Islamic Development Bank (IDB) - 80 million dollars.

Uganda’s electricity access is said to be at 17 percent with a target of having 100 percent by 2035. Rural electrification which was aimed at 10 percent by 2010 is still at 7 percent in 2013.