World Bank willing to resume funding to key road projects

A road construction project in Uganda. File photo

KAMPALA- The World Bank has said it is willing to resume extending aid to Uganda, including lifting suspension on funding for key road projects, but only after key issues it raised with the government more than two months ago have been addressed.

A resumption of financial assistance will see a restart of works on the 100km Kyenjojo-Kabwoya road under the Albertine Region Sustainable Development Project (ARSDP) and the 340km Tororo-Mbale-Soroti-Lira-Kamdini stretch under the North Eastern Road-Corridor Asset Management Project (NERAMP) — both vital tributaries for internal and international trade.

The bank’s vice president for Africa, Mr Makhtar Diop, however, did not give a specific timeline for re-opening of the taps, when he spoke during a videoconferencing interview from Washington DC on Monday evening.

Mr Diop said the bank is “impressed by the way leadership” of the Uganda National Roads Authority (Unra) and President Museveni have taken the issues they raised seriously and pushed for recommendations “in a relatively short period of time.”

“We were concerned that we had to reach this extent; the cancellation of funding but we are both working to ensure that we fulfill our obligation,” Mr Diop said.

He said while in the past the Bank preferred to exhaust all means of engagement, going forward, “we will not compromise on environment and social safeguards on the projects that we fund.” The lending institution has a large loan portfolio in Uganda—about Shs9 trillion ($2.5b)— most of it undisbursed—about Shs6 trillion ($1.8b).

In September it announced withholding of more than Shs5 trillion in new lending until further notice citing the low absorption of funds by government for disbursed funds, the poorest in the region.

Last year, the Bank pulled the plug on Shs800b meant for Transport Sector Development Project, affecting several road projects, including the 66.2km Kamwenge-Fort Portal project which was (is) yet to be completed.

The Kamwenge-Fort Portal road works suffered after Chinese employees of the contractor, the Chinese Railway Seventh Group, were accused by a local child rights NGO of preying on minor girls and sexually abusing female employees. In the same spirit, the bank withdrew funding for road projects under ARSDP and NERAMP.

Mr Diop said the suspension of funding to Uganda was helpful because it enabled them review their funded projects.

Last week, World Bank executive directors discussed a report by the Inspection Panel’s investigation which confirmed all the issues affecting the Kamwenge-Fort Portal project under TSDP and approved the management action plan and response.

Some of the key points in the report which President Museveni has assured will be addressed include supporting the affected girls and their families through a number of programmes for which the bank’s management has guaranteed $1 million (more than Shs3.5 billion); completing the resettlement process and the payment of compensation to project affect persons. Funding for the roads projects will be resumed once Unra and government satisfy the key action points in the report.