MPs clear Shs657b loan for power supply in Luweero
What you need to know:
- As of June 30 last year, the disbursements of the existing loan projects under UETCL stood at only 55 per cent with some loans as old as 2013 registering very 1ow disbursement rates.
Members of Parliament on the Committee of National Economy have endorsed a request by government to borrow up to $178.27m (about Shs658b) to finance power supply in industrial parks in Luweero triangle and Mbale District.
The money will be obtained from the Commercial Bank of China and paid back over a period of 11 years.
The project is expected to cost $209.21m (Shs771b), with the Ugandan government committing Shs116b as counterpart funding.
The parks will be constructed for 18 months for lots one to three and 36 months for lots four to nine.
The request was presented to Parliament in December last year after government realised the need to finance the power supply to industrial parks and upgrade the power transmission extension project.
Beneficiaries include Kapeeka, Sukulu, Wobulenzi, Nakasongola, Kaweeweta and Mbale industrial parks as well as Wobulenzi-Kapeeka and Kapeeka-Kaweeweta Nakasongola transmission lines.
Daily Monitor obtained a copy of the report by the committee chaired by Ms Syda Bbumba (Nakeseke North, NRM) which gives a nod to the request.
The committee, however, cautioned government against slow implementation of the loan should Parliament adopt the report and its recommendations.
“The committee recommends that government ensures adequate counterpart funds for this project are integrated in time into the national budget during the project implementation period,” the report reads in part.
The committee also recommended that government strictly undertakes the procurement process for debt financed projects ahead of time, prior to parliamentary approval as a measure to counter long procurement bottlenecks and lengthy bidding processes.
The committee also notes that the loan will increase the country’s public debt burden. As at end June last year, the committee noted that the stock of total public debt amounted to $12.55b (Shs45 trillion) of which external debt was $8.35b (Shs30.85 trillion), and domestic debt was $4.2b (Shs15.5 trillion).
This is equivalent to 36.1 per cent of GDP in nominal terms (according to the rebased GDP figures using the 2016/17 base year) and 27.3 per cent in present value terms.
As of June 30 last year, the disbursements of the existing loan projects under UETCL stood at only 55 per cent with some loans as old as 2013 registering very 1ow disbursement rates. For example, the Entebbe-Mutundwe transmission line project whose loan was committed in October 2013 but money is yet to be disbursed.
