Project ID: 14235

China Eximbank provides $350 million preferential buyer's credit for Entebbe-Kampala Toll Road Construction Project in Uganda

Commitment amount

$ 373803264.8

Constant 2017 USD

Summary

Funding agency [Type]

Export-Import Bank of China [State-owned Policy Bank]

Recipient

Uganda

Sector

Transport and storage (Code: 210)

Flow type

Export Buyer's Credit

Concessional

Yes

Category

Intent

Mixed (The next section lists the possible statuses.)

Commercial

Development

Representational

Mixed

Financial Flow Classification

OOF-like (The next section lists the possible statuses.)

Official Development Assistance

Other Official Flows

Vague (Official Finance)

Flows categorized based on OECD-DAC guidelines

Project lifecycle

Status

Completion (The next section lists the possible statuses.)

Pledge

Commitment

Implementation

Completion

Suspended

Cancelled

Milestones

Commitment year

2011

Implementation

2012

2012-07-01

Planned start

2012-11-21

Actual start

Completion

2018

2018-06-15

Actual

Description

On May 5, 2011, the Parliament of Uganda ratified a $350 million preferential buyer’s credit (PBC) loan agreement [CHINA EXIMBANK PBC NO. (2011) 8 TOTAL NO. 159] for the 51 km Entebbe-Kampala Toll Road Construction Project. The terms of the loan were as follows: maturity of 20 years, interest rate of 2%, grace period of 7 years, 0.25% management fee, and 0.75% commitment fee. The 51 km expressway project was expected to cost $476 million USD, with $126 million of the funding coming from the Government of Uganda. Toll road revenue was to be deposited in an escrow account and used to service the China Eximbank loan.China Communications Construction Company (CCCC) was the contractor responsible for implementation of the the project. The project was supervised by Beijing Expressway Supervision Company. The purpose of the project was to construct a toll road from Entebbe Airport to the country’s capital, Kampala. It was part of Government of Uganda’s overall strategy for decongesting Kampala through construction of an inner beltway comprising the Kampala Northern and Southern Bypasses as well as an outer beltway along the edges of the Great Kampala Metropolitan Area. It also aimed to enhance trade and movement between the two cities. The four-lane highway also features at least four toll stations and four interchanges with overpasses, along with a connection to the new highway to Munyonyo, Uganda’s major international conference destination. The link between the new highway and Munyonyo includes a 3-km-long, two-lane bridge constructed to run over a Nile River marshland that cuts across the proposed road link. Construction was originally expected to begin around July 2012, with the project taking three years to complete. On November 21, 2012, President Yoweri Museveni Wednesday officially launched the project at a ground-breaking ceremony in Kyengera. The project was completed on June 15, 2018. Seventeen months later, the tolling system for the road was still not operational. Traffic levels were low, which cast doubt on whether the Government of Uganda would generate enough toll revenue to meet its principal and interest repayment obligations under the China Eximbank PBC loan. Also, as of April 2019, the Government of Uganda had still not passed a law to allow for tolling on the road. But its first loan repayment to China Eximbank was due on May 22, 2019.

Number of official sources

20

Number of unofficial sources

23

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Details

Cofinanced

No

Receiving agencies [Type]

Government of Uganda [Government Agency]

Implementing agencies [Type]

Beijing Expressway Supervision Company [State-owned Company]; China Communications Construction Co., Ltd. (CCCC) [State-owned Company]

Loan type

Concessional

Maturity

20 years

Interest rate

2.0%

Grace period

7 years

Management fee

0.25

Commitment fee

0.75

Grant element

56.00770973%

Gurarantee provided

No

Insurance provided

No

Collateralized/securitized

Yes

Collateral

Toll road revenue was to be deposited in an escrow account and used to service the China Eximbank loan.