Uganda’s Parliament Approves Over US$1.3 Billion Loans for Key Infrastructure and Agriculture

The funding approvals come after Parliament had earlier stayed consideration of the loans due to concerns over the financing terms negotiated with the World Bank.

Uganda’s Parliament has cleared the government to proceed with loan financing worth US$1.341 billion to support a series of critical national development projects in infrastructure, education, agriculture, and public sector reform. The approval, made during a sitting on Wednesday, 29 October 2025, chaired by Deputy Speaker Thomas Tayebwa, marks a major step toward unlocking previously delayed funds vital to Uganda’s development agenda.

Loans Approved After Initial Suspension

The funding approvals come after Parliament had earlier stayed consideration of the loans due to concerns over the financing terms negotiated with the World Bank. Lawmakers demanded greater transparency before giving their consent. In response, State Minister for Finance (General Duties) Hon. Henry Musasizi presented the full financing agreement before the House, clearing the way for approval.

The US$1.341 billion loan package includes both credit and grant components under the International Development Association (IDA) of the World Bank Group, with an additional grant worth US$328.3 million to complement the borrowing.

Major Projects Under the Loan Package

According to Minister Musasizi, the funds will finance five strategic programs aimed at addressing national priorities in infrastructure, education, agriculture, and social protection.

1. Uganda Cities and Municipal Councils Infrastructure Development (UCMID): This flagship project will modernise urban infrastructure, improve service delivery, and strengthen the financial management of cities and municipalities.

2. Northern Uganda Social Action Fund (NUSAF IV) – US$250 million: This program will bolster adaptive social protection systems, targeting vulnerable populations in northern Uganda through community-driven development and livelihood programs.

3. Development Response to Displacement Impacts Project (DRDIP) – US$180.5 million: Designed to improve economic opportunities and social services for refugee-hosting districts, the project aims to enhance livelihoods and strengthen resilience among displaced and host communities.

4. Uganda Learning Acceleration Program (ULEARN) – US$210 million: The ULEARN initiative seeks to improve learning outcomes by enhancing education infrastructure, addressing learning gaps, and upgrading school facilities in selected districts.

5. Public Investment and Asset Management for Growth and Resilience (PIMPLUS) – US$200 million: This component focuses on improving government efficiency, accountability, and the sustainability of public investments through reforms in asset management and fiscal responsibility.

Additional Loans for Transport and Agriculture

Beyond the IDA package, the House also approved a loan of Euros115.8 million from Standard Chartered Bank for the construction of critical oil roads. These include:

• The 56.5 km Karugutu–Ntoroko road,

• An 8.2 km link to Rwebisengo, and

• 3.3 km of town roads in Ntoroko District.

The Parliamentary Committee on National Economy, chaired by Hon. John Bosco Ikojo, however, raised concerns that the River Semuliki bridge and several key oil access roads in the Bunyoro sub-region were not part of the financing plan. The Committee urged the Ministry of Works and Transport to expedite the design and construction of these crucial links to improve regional trade and livelihoods.

Differing Views in Parliament

While the majority of MPs backed the loan approvals, Hon. Hassan Kirumira (NUP, Katikamu County South) cautioned against excessive borrowing and questioned the cost-effectiveness of some of the financing agreements. “We must ensure that loans are negotiated on the best possible terms for Ugandans,” he said.

Minister Musasizi defended the government’s position, explaining that multiple institutions were approached, and Standard Chartered Bank offered the most favourable terms after extensive negotiations.

Agricultural Development Gets a Boost

In a further move to strengthen Uganda’s agro-industrialisation agenda, Parliament approved a Euros192.9 million loan from Citi Bank for Phase One of the Enhancing Agricultural Production, Quality and Standards for Market Access Project.

According to Hon. Robert Migadde, Deputy Chairperson of the National Economy Committee, the project aims to build competitive, inclusive, and sustainable agricultural systems across 69 districts spread across 13 agro-ecological zones, including seven districts hosting refugee populations.

“The project will support agro-processors to meet international quality standards and will also benefit students at Makerere University’s School of Food Technology, Nutrition, and Bio-engineering, equipping them with skills for the agro-processing sector,” Migadde explained.

Strengthening Growth, Accountability, and Sustainability

The combined loan portfolio is expected to accelerate Uganda’s Vision 2040 objectives and support social inclusion, job creation, and regional competitiveness. Government has pledged to implement robust monitoring frameworks to ensure funds are used effectively and transparently.

Deputy Speaker Tayebwa commended Parliament for its scrutiny and urged the Ministry of Finance to prioritise loan absorption efficiency and value-for-money outcomes, noting that Uganda’s debt sustainability depends on disciplined fiscal management.

With the approvals now in place, the government is set to commence implementation of these landmark projects — a development that could significantly transform Uganda’s education, transport, agriculture, and urban sectors in the coming years.