The government of Uganda is seeking $267 million for the Kampala-Jinja expressway project. The money is to be obtained from the African Development Bank and the French Agency for Development.
The loan request was presented by Mr. David Bahati, the State Minister for Planning. Both loans have a grace period of eight years and 25 years maturity period. However, the tentative interest for the African Development Bank is 2.25 percent, with a commitment fee of 0.25 percent or the non-disbursed amount.
On the other hand, money from the French Development Agency will attract a tentative interest of 1.5 percent while failure to pay commitment fees will attract a 0.5 percent annual interest on non-disbursed amounts.
The billion-dollar project forms part of the Northern trade corridor from Mombasa in Kenya through Kigali in Rwanda. This is a strategic corridor which serves as a trade link to the sea for landlocked countries of Uganda, Rwanda, Burundi, South Sudan as well as the eastern Democratic Republic of Congo.
The initial project preparation commenced with a feasibility study in 2010 before it hit a snag due to unknown reasons.
This project will be the first built in the country using a public-private partnership model. This implies that the contractor awarded the contract will design, develop, and operate the route for 30 years, earning profits by charging tolls before transferring the ownership to the state.
Road transport is by far the most dominant mode of transportation in Uganda, carrying over 95% of passenger and freight traffic.