The loans to be channeled through the French Development Agency (AFD) are to finance projects to be implemented by Uganda’s agency in charge of water supply, the National Water and Sewerage Corporation, NWSC.
150 million Euros is to finance increasing the volume of clean water in Greater Kmapala to meet the demands of a growing population, while 120 million Euros will be channeled toward upgrading the water supply and sanitation in Southwestern Uganda.
The loan agreements were signed in Kampala Friday morning by Uganda’s minister of Finance and the French Ambassador to Uganda, Virginie Rivoal.
The concessional 270 million Euros will run for 20 years attracting interest fee of 1.25 percent annually.
The two projects are expected to be completed by 2023-24.
According to NWSC statistics, the water supply in Greater Kampala stands at 240 million litres per day against a daily demand of 300 million litres of water, creating a deficit of 60 million litres.
However the loans come as fear is being expressed that Uganda’s national debt of 41% of GDP is almost hitting the 50% World Bank threshold, and that Uganda is to spend a big percentage of its budget in the coming financial years servicing the country’s loans.