09 October 2015, Kampala – The African Development Bank, AfDB, has approved a $121m (Shs 4.4bn) loan and grant to Uganda to help improve access to electricity for rural households and businesses.
The money, approved on September 16, is expected to facilitate economic growth, improve livelihoods and allow access to social services in rural communities, AfDB said in a statement.
AfDB contributed $100m while the additional €10.205 million grant was mobilized from the sustainable energy for all window of the EU-Africa Infrastructure Trust Fund.
AfDB will fund the Uganda Rural Electricity Access project, which will include the development of 1,147km of medium voltage and 808km of low voltage distribution networks.
The project is expected to connect to the grid about 58,206 rural households, 5,320 rural business centres and 1,474 rural public institutions.
AfDB said: “In addition, it will support the scaling-up of “inclusive and green” connections by supplying and installing ready-boards for those who cannot afford household wiring and allowing households to pay connection charges in installments… ”
“The project financing plan also includes a component to support key sector institutions; namely, the Rural Electrification Agency (REA), in its ability to execute and monitor viable feasibility studies and social and environmental assessments, as well as that of the Electricity Regulatory Authority (ERA) to conduct studies to determine appropriate tariff levels.”
Alex Rugamba, AfDB director of energy, environment and climate change department, said: “This project financed in partnership with the EU will advance implementation of the government-led, sector-wide approach in Uganda’s energy sector to drive economic development and improve livelihoods of rural Ugandans.”
Only 16 per cent of the population is connected to the national grid, with most of them living in urban areas. In its Vision 2040, government hopes to have 80 per cent of the population connected.