AfDB grants Uganda $0.5 million for petroleum-sector development

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The African Development Bank (AfDB) and the Government of Uganda have signed a grant agreement, worth US$500,000, for the financing of Uganda’s oil-sector, Micro-, Small- and Medium- Enterprises (MSMEs).

The grant is geared towards boosting business linkages on the East African Crude Oil Pipeline Technical Assistance project, the bank said.

The project’s overall objective is to help develop capacity of local Ugandan MSMEs along the East African crude oil pipeline.

This will be done by enabling them to access new market opportunities, and building linkages with larger, national, regional and international companies.

AfDB, a multi-lateral lender, says the project is 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.

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 the governments of Uganda and Tanzania.

It is aimed at preparing local business communities to be able to retain a portion of the US$3.5 billion investment in the construction of a crude oil pipeline from Hoima in western Uganda to Tanga, on the Coast of Tanzania, agreed in 2016.

This 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.