Uganda is seeking up to €207.7 million ($242.55 million) from Citibank to finance the upgrade of a major road network in the country’s east, adding to borrowing pressures as the government ramps up infrastructure spending.
Uganda seeks a €207.7 million loan from Citibank to upgrade 137 km of roads in the east, aiming to boost connectivity and economic links.Most funds (€179.26 million) will go to construction and insurance, with €28.51 million allocated for land compensation and project supervision.The new road project is part of Uganda’s broader infrastructure push but raises concerns about worsening debt burdens.Uganda’s central bank and the IMF warn that growing debt-service costs could limit funding for key sectors like education and healthcare.
Uganda is seeking up to €207.7 million ($242.55 million) from Citibank to finance the upgrade of a major road network in the country’s east, adding to borrowing pressures as the government ramps up infrastructure spending.
The proposed loan will fund the rehabilitation of the 127-kilometre Jinja-Mbulamuti-Kamuli-Bukungu road, as well as 10 kilometres of urban roads in Jinja City, bringing the total network covered by the project to 137 kilometres.
Finance Minister Henry Musasizi told lawmakers that the project is expected to improve connectivity across the Busoga sub-region, facilitate the movement of people and goods and create an alternative transport link between northern and southern Uganda.
Of the proposed financing, €179.26 million will go toward civil works and commercial insurance, while €28.51 million will cover land acquisition compensation and construction supervision.
The road project is part of Uganda’s broader push to improve transport infrastructure and strengthen connections between economic centres.
But the planned borrowing comes as the East African country faces growing concerns about its debt burden and the amount of government revenue being used to service existing loans.
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Uganda’s central bank has previously warned that rising debt-service costs are putting pressure on resources available for critical sectors, including education and healthcare.
The International Monetary Fund expects that pressure to increase. In its latest Article IV consultation, the IMF projected Uganda’s debt-to-GDP ratio would rise to 55.5% in the fiscal year that began in July, before climbing to almost 60% by 2030/31.
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Uganda’s borrowing has also drawn attention from credit-rating agencies. Earlier this month, Fitch Ratings affirmed Uganda’s sovereign rating at B with a stable outlook, but said the rating remained constrained by rising public debt and a high interest burden.
The Citibank loan therefore highlights a broader challenge for Uganda: infrastructure investment could improve trade and connectivity, but financing major projects through additional borrowing risks increasing the country’s debt-servicing obligations.
The government has not disclosed the final terms of the proposed financing or when construction is expected to begin.
