|Approval Date||20 Jul 2018|
|Signature Date||07 Jun 2019|
|Sovereign / Non-Sovereign||Non-Sovereign|
|DAC Sector Code||24030|
The proposed facility fully aligns with Uganda’s “Vision 2040”, NDP II and the ADB’s CSP for Uganda. Uganda Development Bank Limited (UDBL), the country’s premier development financial institution’s duty is to help accelerate Uganda’s development by supporting small & medium enterprises (SMEs) and large-scale development projects in the various key growth sectors, thereby, address the financing gap to SMEs and Infrastructure projects in the country. The proposed financial package relates to the provision of: (i) a USD 15 million Sovereign-Guaranteed Line of Credit (LOC); (ii) a non-sovereign USD 5 million Line of Credit under the SME Program; and, (iii) a Technical Assistance Grant of up to USD 1 million. The sovereign LOC will enhance the lending capacity of UDBL at longer tenors and at a price that is reasonable for financial intermediation while the non-sovereign LOC will facilitate additional lending to SMEs and support UDBL’s intervention in focus areas. The TA linked to the SME program funding will help strengthen the capacity of UBDL staff in areas where some weaknesses have been identified. The AfDB longer tenor funds will allow UDBL to meet its customers’ borrowing requirements particularly in industries where long tenured funds are scarce/ unavailable due to the perceived risk profile of SMEs. It will help reinforce UDB’s role as a national development bank in implementing the country’s NDP and complement UDBL’s efforts to diversify its funding base and mobilize resources from other sources.
UDBL intervenes in sectors such as agriculture and agro processing, hotel and tourism, education, health and manufacturing among others. The project will thus enhance private sector development, by demonstrating the viability of investing in growth-oriented SMEs. Additionally, increased revenue by the beneficiaries at sub-project level will lead to incremental tax. The facility will also support financial inclusion, gender and social benefits. The investment will further contribute towards provision of quality and low-cost education and health services to thus narrowing the existing widening social and income gaps in the country.
The project will enhance private sector development, by demonstrating the viability of investing in growth-oriented SMEs. The proposed pipeline is expected to directly and indirectly contribute towards: i) creation of jobs for Ugandan including youth and women; and (ii) development of social infrastructure including schools, hospitals and reach underserved rural areas. Nine (equivalent to 33%) of the indicative pipeline projects are from rural areas and 829 of the jobs created will be for women.
African Development Bank
|Last Update||18 Feb 2020|
|Name||MACHARIA Julius Karuga|