Business
Japan lends Uganda more, at better terms
Minister Kasaija and Ambassador Kameda exchange statements
The Japanese Ambassador to Uganda Kazuaki Kameda and the Minister of Finance Matia Kasaija have signed two loan agreements totaling US$175.3m (Approximately UGX647bn) towards the completion of the new Nile Bridge and the construction of power transmission sub-stations in Kampala.
In addition to the loans, the Japanese Government extended a grant of US$27m (Approximately UGX100bn) to help rehabilitate three regional referral hospitals in Gulu, Lira and Arua districts of Northern Uganda.
Finance Minister Matia Kasaija praised the Japanese commitment as the biggest they’ve ever made in a single financial year. He also hailed the Japanese for their continued offer of loans at very concessional terms.
Japanese Ambassador Kazuaki Kameda said the two loans will attract just 0.01percent interest and both are payable over a period of 40years.
Of the US$175m, US$128.9 will be used to build two 220kilovolt substations in Kampala similar to the one at Clock Tower in Kampala that has just been completed. The balance of the money will be used to upgrade three existing 132kilovolt substations and strengthen the urban electricity transmission grid and provide a mobile substation for emergency response.
Energy minister Irene Muloni hailed the loan project as a step in the right direction of improving the quality of power in Uganda.
In recent years, Uganda’s Debt levels have worsened due to government’s poor financial management practices, but also due to higher levels of interest paid.
China for example is one of Uganda’s big lenders but its interest rates are said to be very high.
Asked why Uganda does not seek more concessional loans from Japan, Minister Kasaija said, they are not easy to obtain.
But in an apparent sign of dependence on foreign assistance and possible mismanagement, as the Japanese were announcing financial support for three referral hospitals in Northern Uganda, the Director of Clinical Services Dr. Charles Olara pointed out that Soroti referral hospital which is was renovated using funds from Japan only a few years ago, is in need of repair.
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