Uganda has secured a €270 million loan from the African Export-Import Bank (Afreximbank) to finance critical infrastructure and development projects under its 2024/25 budget, the Ministry of Finance announced.
The 10-year loan facility will fund investments in infrastructure and human capital development, with the government stating that the financing is expected to drive sustainable growth and accelerate social and economic transformation.
According to the Ministry, the loan will support a wide range of government projects, including value addition in agriculture, support to the oil and gas sector, energy generation and distribution, the development of special export processing zones, and the construction and maintenance of roads, railways, and ports.
The Ugandan government has made infrastructure expansion a central pillar of its economic strategy. The Ministry of Finance said the new loan would channel resources into key areas designed to stimulate long-term productivity.
“These funds will support various government projects and programmes including value addition to agriculture, support to the oil and gas sector, energy generation, transmission and distribution, special export processing zones and industrial parks, construction and maintenance of existing road, rail and port infrastructure,” Finance Minister Matia Kasaija said in a statement.
Uganda’s oil and gas industry is growing through major projects such as the Kingfisher and Tilenga oilfields, along with the East African Crude Oil Pipeline (EACOP), which will transport oil through Tanzania for export.
The country plans to start producing oil in 2025. Uganda is also building facilities to process oil and gas, which could allow it to export LPG to the region. In addition, the government hopes to attract more investment through new licensing opportunities and pipeline development.
Afreximbank, which finances trade and investment projects across Africa, described the facility as evidence of its strong commitment to Uganda’s development agenda. The bank is also expanding its footprint in Uganda. Afreximbank has chosen Kampala to host its first East African regional office, currently under construction on Yusuf Lule Road. The new office will house the Afreximbank Africa Trade Centre (AATC), which will anchor the bank’s operations in the region and provide trade-related financing services.
Government officials said the establishment of the office demonstrates Afreximbank’s confidence in Uganda’s economic prospects and its role in shaping the future of African trade. The African Export-Import Bank plays a pivotal role in supporting African countries to reduce dependence on commodity exports by promoting industrialisation, trade finance, and intra-African commerce.
By selecting Uganda as the hub for its East African operations, Afreximbank is signaling its long-term commitment not only to the country but to the wider region. The new Africa Trade Centre will facilitate access to financing for businesses, helping to unlock opportunities for regional integration at a time when Africa is pushing forward with the African Continental Free Trade Area (AfCFTA).
While the loan is expected to inject much-needed financing into Uganda’s infrastructure pipeline, questions remain about the country’s rising debt levels. Uganda’s public debt has grown steadily in recent years, raising concerns about sustainability and repayment risks.
The government, however, has defended its borrowing strategy, saying that concessional loans such as the Afreximbank facility are necessary to close the infrastructure gap and drive economic growth. Officials maintain that the returns from completed projects will eventually ease the debt burden through higher revenues and stronger growth.
The move could also align with Uganda’s broader ambitions to harness its oil and gas resources, expand agricultural exports, and invest in renewable energy. Infrastructure development, experts say, will be critical to ensuring these sectors contribute meaningfully to GDP growth.
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