Uganda secures $295m loan from Islamic Development Bank for infrastructure projects

Uganda has inked a significant agreement with Saudi Arabia’s Islamic Development Bank (IDB) to bolster its infrastructure development endeavours.

The $295 million loan, aimed at financing road construction and other crucial projects, marks a pivotal step for the East African nation in diversifying its external funding sources.

The move comes amidst prolonged negotiations with the World Bank, which have yet to yield tangible results.

Matia Kasaija, Uganda’s Finance Minister, officially sealed the loan agreement with IDB President Muhammad Al Jassar in Riyadh, the capital of Saudi Arabia.

Kasaija shared the milestone announcement via his social media handle on X.

According to the Ministry of Finance, the allocated funds will primarily facilitate the construction of a bridge spanning the River Nile in northwest Uganda.

Additionally, the loan will support the development of roads spanning a total distance of 105 kilometers, strategically enhancing transportation infrastructure within the country.

The decision to secure financing from IDB underscores Uganda’s proactive approach to seeking alternative avenues for external funding, particularly in light of the stalled discussions with the World Bank.

The latter, traditionally one of Uganda’s primary external lenders, suspended new loan disbursements to the nation following the enactment of stringent anti-homosexuality legislation.

Uganda’s collaboration with IDB not only signifies a vital boost to its infrastructural landscape but also highlights the nation’s commitment to forging strategic partnerships to foster sustainable development initiatives.