Parliament approves sh70b loan for Nebbi–Goli road upgrade

KAMPALA - Parliament has approved a $20m (sh70b) loan from the Arab Bank for Development in Africa (BADEA) for the construction and upgrading of the Nebbi–Goli Road, a 16-kilometre stretch in northwestern Uganda.

The approval followed a report presented on Tuesday, October 28 2025, by John Bosco Ikojo, chairperson of the Parliamentary Committee on National Economy, who urged lawmakers to endorse the loan request.

Background

Nebbi–Goli Road is a vital gravel road connecting Nebbi town to the Goli border with the Democratic Republic of Congo (DRC). It links Kampala via the Arua Highway to key customs points such as Goli, Paidha, and Vura, serving as a major trade route for heavy goods vehicles transporting goods into the DRC.

The road also provides essential access to Zombo District and the surrounding communities.

Currently, the unpaved road cannot safely accommodate the volume of traffic, leading to high vehicle operating costs, long travel times, increased accident risks, and higher road maintenance expenses.

The government aims to upgrade the road to paved Class II standard, with a 7-metre carriageway and 1.5-metre shoulders on each side, including proper drainage, bridges, road signage, and safety features.

The project is part of Uganda’s Integrated Transport Infrastructure and Services (ITIS) program, under the Third National Development Plan (NDP III), which seeks to improve transport infrastructure across the country.

Project scope and components

The $23m (sh80b) project, including a $2.96m (sh10b) contingency, will cover:
Road Upgrading ($16m): Transforming the gravel road into a Class II paved road with a 20-year design life, proper drainage, and safety structures. Tree planting is included as part of the Environmental and Social Management Plan (ESMP).

Consultancy Services ($1.4m): Design review and supervision to ensure construction meets high technical, safety, and environmental standards.

Project Implementation Unit Support: Operational and logistics support for project monitoring.

Land Acquisition and Compensation: Acquisition of land and compensation for Project Affected Persons (PAPs).

Audit ($0.05m): Oversight by the Auditor General to ensure compliance with financial and procurement standards.

The loan carries a 1% interest rate over 20 years, with a five-year grace period, and a commitment fee of 0.75% on the undisbursed balance.

Its net present value (NPV) is $14.47m, and the total future repayment will be $25.28m. The loan is highly concessional, with a grant element of 28%, below the 35% concessional threshold.

Economic benefits

The project is expected to generate a positive Net Present Value of $19.64m and an Economic Rate of Return (ERR) of 25%, significantly above Uganda’s economic opportunity cost of capital. It will improve market access for farmers, traders, and truck drivers, facilitate trade with the DRC, and stimulate regional economic growth.

The committee made the following recommendations: 

Finalising detailed project designs before securing financing to avoid cost overruns.
Government to provide its $3m counterpart funding, especially for land acquisition and PAP compensation.

Updating the feasibility study to reflect current traffic and design standards.
Harmonising the project with the proposed Standard Gauge Railway (SGR) Northern Route, which will terminate at Goli border, to ensure integrated transport planning.

The committee concluded that the loan request should be approved, enabling the timely upgrading of the Nebbi–Goli Road and improving transport services in the West Nile region.