Parliament last week allowed the Government to borrow sh206b from the World Bank to finance the second phase of the Northern Uganda Social Action Fund (NUSAF).
The decision was taken amid complaints by the NUSAF members over the poor implementation and monitoring of the first phase, which ended in March.
The chairperson of the national economy committee, Stephen Birahwa, in a report to Parliament, said phase one of the project was mismanaged by the the local leaders due to lack of stakeholdersâ€™ involvement.
Some MPs argued that the shortfalls of the first phase have made the north remain the poorest region in Uganda.
MPs from the north welcomed the Governmentâ€™s move to reconstruct the region but were angry that those who had misused the funds had not yet been prosecuted.
The second phase of the fund was to be implemented for five years, starting from September 1.
The project will be implemented in Acholi, Bukedi, Bunyoro, Elgon, Karamoja, Lango, Teso and West Nile regions.
The state minister for northern Uganda rehabilitation, David Wakikona, said the fund would accelerate development in the region through income-generating projects, public infrastructure and service provision.
Sh206b for northern Uganda