The African Export-Import Bank (Afreximbank) and the Uganda Development Bank (UDB) have entered into a strategic partnership aimed at enhancing support to Uganda’s private sector.
The collaboration, formalized through the Joint Project Preparation Facility (JPPF) Framework Agreement, will provide critical early-stage project preparation financing and technical support services to both public and private sector entities.
The facility, valued at $25 million (approximately UGX 93 billion), is specifically designed to bolster Uganda’s industrialization efforts and enhance export development activities.
This will be achieved by funding the preparation of projects that are vital for investment within the country. UDB, as Uganda’s sole development bank, has increasingly focused on promoting youth, women, and small and medium enterprises (SMEs) within the government’s priority sectors.
The Framework Agreement establishes a joint project preparation facility that aims to unlock investments in key sectors such as energy, transport and logistics, special economic zones, industrial parks, manufacturing, agro-processing, hospitality and tourism, mining, solid minerals, and services. These sectors are often considered high-risk by other lenders, leading to their underfunding and limited development.
The JPPF will play a pivotal role in de-risking projects, thereby accelerating their development from the conceptual stage to bankability. This will be achieved by covering the costs associated with feasibility studies, project development, advisory services, and other related expenses.
Kanayo Awani, the Executive Vice President of Intra-African Trade at Afreximbank, signed the agreement on behalf of the Pan-African bank. Speaking on the occasion, Awani emphasized the significance of the JPPF as a collaborative tool that enables the pooling of resources to prepare bankable projects.
“One of the major challenges in developing projects is moving commercially viable projects to financial close. Through this partnership, Afreximbank intends to work alongside UDB to prepare quality, bankable projects that can attract investments from both the public and private sectors,” Awani stated.
Samuel Edem Maitum, Director of Credit at UDB, echoed these sentiments, noting that numerous transformative project ideas in Uganda remain unimplemented due to a lack of technical and financial support needed to ensure their bankability.
“This collaboration through the Joint Project Preparation Facility shall unlock several transformative private and public sector-led projects,” he said. Maitum added that the deal would facilitate the flow of capital to these jointly prepared projects, which is expected to accelerate economic growth in Uganda.
The implementation of this agreement is poised to significantly enhance private sector investment in Uganda’s targeted sectors, positioning the country as an attractive destination for investors by supplying a steady stream of investment-ready projects.
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