UK loans $318m for new Ugandan international airport

In its biggest ever loan to an African government, a UK state finance agency will lend $318m (€270m, £238m) for the construction of a new international airport in Uganda, with the contract going to Colas UK.

The new airport in the Kabaale region will be Uganda’s second international airport after Entebbe (pictured), facilitating delivery of equipment, materials and services in its first phase and tourism later.

In a press statement today UK Export Finance (UKEF), headed by UK International Trade Secretary Liam Fox, said the new airport would enable "vital work to be carried out on large-scale infrastructure and energy projects planned in the area" and will have "significant long-term benefits for the country’s developing economy and energy independence".

It is UKEF’s first major project in Uganda. The agency offers UK-government backed loans to overseas buyers in support of UK exports.

UKEF’s loan will help pay Sussex-headquartered Colas UK for building the runway, taxiway, cargo terminal and other infrastructure.

Work is scheduled to begin in January 2018. Additional financing will be provided by Standard Chartered which acted as the lead arranger for the deal.

International Trade Secretary Liam Fox said: "The UK is a global leader in the infrastructure sector and I’m delighted that UK Export Finance is helping the Ugandan government and Colas on this significant project.

Director of Strategic Projects at Colas UK, Carl Fergusson, said Uganda had "huge untapped natural resources, rapid urbanisation and attractive demographics", adding that "the requirement for investment in infrastructure to support continued regional development is clear".

However, the project’s sponsors will be hoping the new airport does not suffer the same fate as an airport project in Mozambique.

As the BBC reported last week, a $200m redevelopment of Nacala Airport in 2014 was meant to make it Mozambique’s second busiest airport, but three years later it is practically unused, operating at only 4% of its capacity.

As the BBC reported, the company that built it, Brazil’s scandal-hit Odebrecht, has admitted to paying bribes.

Image: The new airport will become second to Uganda’s Entebbe International Airport, pictured here (Wikimedia Commons)

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  1. I don’t think Uganda is ready for another airport at this stage. The country’s only airport, Entebbe, is not fully utilised. Like the Nacala airport in Mozambique, the proposed Kabale structure will not be of much use to nation.

  2. This is very good not only for Uganda’s Economy but the Great lakes region

  3. Yes the purpose is questionable. Was there only one contract submitted?

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