The East African nation, Uganda, plans to borrow $358 million from regional and private lenders to finance major infrastructure projects, including a critical power line to South Sudan.
According to Junior Finance Minister Henry Musasizi in a statement on Thursday, the loan will finance a high-voltage transmission line linking Uganda’s power grid to neighbouring South Sudan.
He further stated that the funds will be sourced from the African Development Fund (ADF), the Arab Bank for Development in Africa, and Standard Chartered Bank.
Deputy Speaker Thomas Tayebwa referred the loan request to a joint committee of ruling and opposition lawmakers for review before a final vote by the House.
In addition, other projects to be financed by the loan include a road in the country’s northwest linking Uganda to the Democratic Republic of Congo (DRC) and the expansion of clean water access.
Uganda now produces surplus power after commissioning a $1.7 billion Chinese-funded hydropower dam last year.
The country has been planning to export part of this excess electricity to energy-starved South Sudan.
In May 2024, Uganda got into talks with Chinese firm Sinohydro to develop the project.
It will involve the construction of a 138-kilometre (85.75 miles) high-voltage transmission line, the expansion of two substations, and the construction of a new one.
In February 2025, it was stated that the new interconnection will integrate South Sudan into the East African Power Pool will address its electricity shortages.
Additional energy investments
Beyond the loan-backed projects, Uganda is pursuing broader energy access initiatives.
The Uganda Electricity Distribution Company Limited (UEDCL) announced a $350 million plan to expand the distribution network over the next five years.
The project targets 47,000 new household and business connections each month.
In parallel, the government also launched a $638 million Electricity Access Scale-up Project (EASP) supported by the World Bank.
The initiative will to provide free electricity connections to more than 900,000 households.
The project aligns with Uganda’s Energy Transition Plan and the global Sustainable Development Goal 7 of universal access to reliable, affordable energy by 2030.
Regional financing support
In December 2024, the African Development Fund approved a $260 million financing package for the Uganda-South Sudan interconnection project.
Meanwhile, Uganda received a $119.21 million loan, while South Sudan secured a $32.5 million grant.
Additional support includes a €48.93 million grant from the European Union and counterpart funding of $17.44 million from Uganda’s government.
The project’s components include the construction of a 299-kilometre transmission line between Gumbo, near Juba, and Olwiyo in Uganda.
It also involves the establishment of two new substations at Gumbo and Biba, along with the expansion of the Karuma and Olwiyo substations.
