AfDB approves financing for US$1.55 billion expressway PPP in Uganda

AfDB approves financing for US$1.55 billion expressway PPP in Uganda

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The African Development Bank (AfDB) has approved a sovereign loan of US$229.5 million to the Republic of Uganda to finance phase one of the Kampala-Jinja Expressway project. Total project cost is estimated at US$1.55 billion, with financing from sovereign and non- sovereign facilities.

Scheduled to be managed over the next 30 years (including an five-year construction period) under a concession-based Public Private Partnership (PPP) arrangement, the project comprises of two phases: the Kampala-Jinja Mainline Expressway and Kampala Southern Urban Bypass (KSB), collectively known as the Kampala-Jinja Expressway PPP Project.

The Uganda National Roads Authority (UNRA) issued a Request for Qualifications (RFQ) for the project in May this year. The selected private partner will design, construct, operate and maintain the 95km limited access tolled expressway, financing US$800 million of the total cost.

As we reported last month, eight companies and consortia have submitted pre-qualification applications. These include  prolific international infrastructure developers Vinci, Strabag and China Communications Construction Company. The UNRA expects the assessment and approval process to take approximately two months.

The schedule outlined when the RFQ was published envisaged the submission of final bids in May 2019, with the aim of achieving commercial close with the successful bidder in November 2019.

The AfDB loan will finance infrastructure development, project implementation support and community livelihoods improvement activities along the expressway. It is co-financed with the European Union and Agence Francaise de Developpment, with total co-financing amounting to US$400 million.

The expressway is located along Uganda’s Northern Corridor, a strategic route within the East African Community, linking Uganda, Rwanda, Burundi, Democratic Republic of Congo and South Sudan with Kenya’s Mombasa maritime port. It is easily the most important route on the national road network, taking 30% of international traffic to Burundi, 60% to Rwanda and almost 100% to Uganda. It also carries over 90% of Uganda’s imports and exports.

The Kampala-Jinja corridor has experienced accelerated development over the last 20 years, and currently experiences traffic overload, registering over 1,000 vehicles per hour per lane, with consistent breakdown of traffic flows, according to a 2017 study conducted by the UNRA.

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