China Eximbank provides RMB 1.049 billion government concessional loan for National Data Transmission Backbone Infrastructure/E-Government Infrastructure Project Phase V (Linked to Record ID#53401, 59750, 53402)

Project narrative

On March 10, 2023, the Chinese Government and the Government of Uganda signed a preferential loan framework agreement for the National Data Transmission Backbone Infrastructure/E-Government Infrastructure Project Phase V. Then, on December 8, 2023, the Government of Uganda and China Eximbank signed an RMB 1,049,999,568.01 ($146,713,555) government concessional loan (GCL) agreement [CHINA EXIMBANK GCL NO.(2023) 05 TOTAL NO.(773)] for the National Data Transmission Backbone Infrastructure/E-Government Infrastructure Project Phase V. The loan agreement officially went into effect on September 18, 2024 (after all conditions set out in Article 9.1 of the loan agreement had been met). The loan carries the following borrowing terms: a 20-year maturity, a 5-year grace period, a 2% interest rate, a 0.25% commitment fee, and a 0.25% (RMB 624,998.92) management fee. As a source of collateral, the project's end-user -- the National Information and Technology Authority - Uganda (NITA-U), an autonomous government parastatal under Uganda's Ministry of ICT -- agreed to deposit all income generated by the project into a UGX sales collection account (at Stanbic Bank Uganda Limited), pursuant to a Repayment Mechanism Arrangement Agreement and a Sales Collection Arrangement Agreement. The Government of Uganda also agreed to maintain a minimum cash balance of $3 million in a repayment reserve account during the loan's grace period and deposit an additional $10 million in the same repayment reserve account before the loan’s first repayment date and for the full duration of the loan’s repayment period. The borrower is expected to use the proceeds of the loan to finance a commercial contract [NITA-U/SUPLS/21-22/0001] between Uganda's National Information Technology Authority and China International Telecommunication Construction Corporation, which was signed on April 22, 2022. As of December 2024, the loan had achieved a 30.1% disbursement rate ($44,217,335 out of $146,713,555). The project has four components. The first component involves the construction of a 3,604 km backbone network and 51 backbone transmission sites. The second component will seek to cover the last mile of 2,24O km, with 800 site connections meeting the last mile network service demands of government sites. The third component involves the construction of a new data center in Namanve with a capacity of 18O cabinets and corresponding 52 data center cabinets. The fourth component will cover construction and management system maintenance, project management services and warehousing of the project logistics. China International Telecommunication Construction Corporation is the contractor responsible for implementation. On September 18, 2024, the lender issued a Notice of Effectiveness Certificate for the project, marking its effective commencement date.