Uganda: US$331 million loan for electricity access approved

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Parliament has approved a request for government to borrow up to US$331.5 million, from the International Development Association of the World Bank Group, upon which it will obtain a grant worth US$ 276.5 million.

The loan is for financing the Electricity Access Scale Up Project (EASP), whose aim is to increase access to electricity nationwide.

While presenting loan request to Parliament, the Minister of State for Planning, Hon. Amos Lugoloobi, said the EASP envisages an increase in access to electricity from the current 19 per cent to 44 per cent by 2027.

“In this, the project forecasts an increase in the number of connections annually from the current average of 70,000 to 300,000 connections,” said Lugoloobi.

This was during the plenary sitting of Tuesday, 22 November 2022 chaired by Speaker Anita Among.

Lugoloobi added that the loan is expected to increase the share of clean energy usage for cooking from 15 to 40 per cent by 2027.

He said that the project will be equitable as it will include the disadvantaged communities in its beneficiaries. “The project will benefit households, commercial enterprises, industrial parks, public institutions. It will support refugees and host communities and women,” Lugoloobi said.

He further stated that the Ministry of Energy and Mineral Development and the Uganda Energy Credit Capitalisation Company (UECCC) will be the main project implementing partners.

The loan request did not meet any resistance during its processing in the committee and in plenary, which MPs attributed to the project’s equitable nature.

“Ordinarily we [the Opposition] are not opposed to borrowing. We are only opposed to misguided borrowing and poor loan management but with respect to this loan, it is national in character and reflects equitable distribution. It is good for development,” said Hon. Medard Sseggona who represented the Leader of the Opposition in Parliament (LOP).

He applauded the component of grant as one of the conditions for the loan and asked government to formulate a debt management policy.

The report for the loan was presented by the Chairperson of the Committee on National Economy, Hon. John Bosco Okojo, also Bukedea County MP.

Sseggona, also Busiro County East MP, however, opposed the proposal to have the energy ministry run the project and instead sought restoration of the Rural Electrification Agency (REA).

“Now you are taking us back to this ministry that has always dodged its responsibilities in electricity infrastructure. I wish government could reconsider the disbandment of Rural Electrification Agency. REA did a good job,” said Sseggona.

Speaker Among, in agreement with Sseggona, called on government to reinstate REA whose track record she said was commendable.

“I also want to agree with the LoP on the issue of REA. Give us back our REA, the management could have been bad, but you can get other management. REA did a good job and it had good success stories,” said Among.

Distributed by APO Group on behalf of Parliament of the Republic of Uganda.