January 18, 2017 / 10:16 AM / 10 months ago

Uganda wraps up financing talks for $400 mln for expressway

KAMPALA, Jan 18 (Reuters) - Uganda has concluded talks with the European Union, the French Development Agency and the Africa Development Bank (AfDB) on them jointly financing $400 million of a planned $1.1 billion expressway, a senior government official said on Wednesday.

The three will provide the $400 million in a mix of grants and credit, said Patrick Muleme, head of design at state-run Uganda National Roads Authority (UNRA).

“What we are waiting for is their boards to approve,” Muleme said.

In recent years, East African nations have been racing to invest in new infrastructure like roads and railways, to boost trade links and to make up for decades of under-investment.

The new 95-kilometer multi-lane expressway will be an alternative route connecting the capital Kampala and Jinja, an industrial town in eastern Uganda.

Rising traffic has worsened congestion on the existing highway, Muleme said, adding the new toll road will help ease that congestion, and speed up the flow of transit cargo to Rwanda, Burundi and eastern Congo.

It will be part of a network of transport links, known as the Northern Corridor, covering Uganda, Rwanda, Burundi and eastern Democratic Republic of Congo.

“This corridor is just opening the gateway for east Africa,” Muleme said.

The construction of the new highway is planned to be implemented in two phases at a cost of $700 million for the first part and the remainder taking up $400 million.

Private investors will put in $300 million under a public private partnership model, Muleme said, to meet the full cost of the first phase. The second phase will be financed using a similar mix.

Tendering for a developer and private sector financiers for the new expressway is planned for around March and construction is expected to start in the next 12-18 months.

Uganda, a prospective, crude oil producer is at various stages of implementing a range of other major public infrastructure works, mostly funded with Chinese credit.

The projects include a new standard gauge railway line to connect Kampala and the country’s border with Kenya. (Reporting by Elias Biryabarema; Editing by Raissa Kasolowsky)

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