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Afreximbank and UDB have partnered to provide early-stage project preparation financing to Uganda’s private and public sectors. The $25 million facility will support industrialization and export development by funding the preparation of investment-ready projects across key sectors.

The African Export-Import Bank (Afreximbank) and the Uganda Development Bank (UDB) have entered into a strategic partnership to bolster support for Uganda’s private sector.

This collaboration, formalized through the Joint Project Preparation Facility (JPPF) Framework Agreement, aims to provide essential early-stage project preparation financing and technical support to both public and private entities. The facility, valued at $25 million (approximately UGX 93 billion), is specifically designed to enhance Uganda’s industrialization and export development efforts.

The JPPF will finance the preparation of key projects that are critical 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 aimed at unlocking 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, often viewed as high-risk by other lenders, have been underfunded, limiting their development.

The JPPF will play a vital role in de-risking these projects, facilitating their development from the conceptual stage to bankability by covering costs associated with feasibility studies, project development, advisory services, and related expenses.

Kanayo Awani, Executive Vice President of Intra-African Trade at Afreximbank, signed the agreement on behalf of the Pan-African bank. In her remarks, Awani highlighted the significance of the JPPF as a collaborative instrument that enables the pooling of resources to prepare bankable projects.

“One of the major challenges in project development is advancing commercially viable projects to financial close. Through this partnership, Afreximbank will work alongside UDB to prepare high-quality, bankable projects that can attract investment from both the public and private sectors,” Awani stated.

Samuel Edem Maitum, Director of Credit at UDB, shared similar sentiments, noting that numerous transformative project ideas in Uganda have yet to be implemented due to the lack of technical and financial support required to ensure their bankability.

“This collaboration through the Joint Project Preparation Facility will unlock several transformative private and public sector-led projects,” he said. Maitum further noted that the agreement would facilitate capital flow to these jointly prepared projects, which is expected to accelerate economic growth in Uganda.

The implementation of this agreement is anticipated to significantly enhance private sector investment in Uganda’s targeted sectors, positioning the country as a prime destination for investors by consistently providing investment-ready projects.