Uganda Secures €183 Million Loan for Strategic Towns Water Supply Project

Parliament has approved government borrowing of €183,309,847.16 from Standard Chartered Bank and UGX 120,395,249,259 (approximately €29,572,296) from the domestic market via a 6-month Treasury bill. The funding is earmarked for the Strategic Towns Water Supply and Sanitation Project – Phase II, aimed at improving water access and sanitation services across Uganda.

The loan authorization was granted during the tail-end of Wednesday’s (17th September) parliamentary plenary, shortly before Deputy Speaker Thomas Tayebwa adjourned the session sine die.

Project Overview

The Strategic Towns Water Supply and Sanitation Project – Phase II is part of the government’s broader initiative to enhance water infrastructure, reduce waterborne diseases, and expand reliable water and sanitation services in urban and peri-urban areas. Phase II will focus on smaller but rapidly growing towns, ensuring access to safe water and proper sanitation facilities for residents, while promoting sustainable utility management and operational efficiency.

Funding Breakdown

• External borrowing: €183,309,847.16 from Standard Chartered Bank
• Domestic financing: UGX 120,395,249,259 (approx. €29,572,296) via a 6-month Treasury bill

The combination of external and domestic financing reflects Uganda’s strategy of leveraging both international and local capital markets to fund key infrastructure projects.

Economic and Business Implications

The project is expected to stimulate local business activity by creating construction-related jobs, boosting demand for water infrastructure materials, and supporting local suppliers and contractors. Reliable water and sanitation services also reduce operational risks for businesses, particularly in the hospitality, manufacturing, and health sectors.

Improved water supply is a critical factor for attracting investment, enhancing public health outcomes, and supporting Uganda’s rapid urbanization. Analysts note that infrastructure projects of this nature can help strengthen investor confidence in Uganda’s development agenda while contributing to long-term economic growth.

With parliamentary approval secured, government agencies are now poised to mobilize funds and commence Phase II of the Strategic Towns Water Supply and Sanitation Project. Stakeholders in both the public and private sectors will be closely monitoring the rollout, given its potential impact on urban development, public health, and business operations across Uganda.