AfDB grants Uganda US$500k for petroleum capacity development

Image: Construction Review Online

UGANDA – The African Development Bank (AfDB) and the government of Uganda have signed a US$500,000 grant agreement for financing of micro, small and medium enterprises (MSMEs) to boost business linkages on the East African Crude Oil Pipeline technical assistance project.

The project aims to develop capacity of local Uganda MSMEs along the East African crude oil pipeline, by enabling them to access new market opportunities and building linkages with larger, national, regional, and international companies.

The project seeks to support inclusive private sector growth and the creation of an estimated 500 jobs along the pipeline.

Through the Fund for African Private Sector Assistance (FAPA), the Bank will contribute US$500,000 to the project while the government of Uganda through the Petroleum Authority will provide counterpart funding.

A similar project is being finalised on the Tanzanian side of the border.

The grant was provided in response to a request from Uganda and Tanzania for assistance in preparing local business communities to be able to retain a portion of the US$3.5bn investment in the construction of a crudenoil pipeline from Hoima in western Uganda to Tanga, on the Coast of Tanzania, agreed in 2016.

That signing has recently been followed by the signing of an agreement in September 2020 between the two governments, for the project to be undertaken by Total E&P as the lead private sector developer.

The grant agreement was signed on 17 September by the bank’s acting senior vice-president and chief finance officer Swazi Tshabalala on behalf of the African Development Bank, and Matia Kasaija, Ugandan minister of finance, planning and economic development.

The target is to have at least 100 local micro business in Uganda and Tanzania trained to do business on the pipeline project.

It is also expected to link at least 70 business enterprises or other relevant business transactions undertaken on the pipeline.

With the increased number of enterprises joining petroleum supplier databases in both Uganda and Tanzania, new job opportunities would also be created for about 500 people.

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