Development bank seeks infrastructure fund

Apr 11, 2013

The Uganda Development Bank (UDB) has asked the Government to empower it to carry out one of its core mandate of advancing infrastructure funding.“A development bank is about infrastructure. It is about roads, dams and the railway line. It is not about micro-finance.”

By Billy Rwothungeyo

The Uganda Development Bank (UDB) has asked the Government to empower it to carry out one of its core mandate of advancing infrastructure funding.

“Give us an opportunity to start an infrastructure fund. If you are building Karuma dam, why is UDB not the lead arranger of the project fund? Why are we arranging these small deals? You find the IGG (Inspector General of Government) running around chasing after $10m. UDB should be talking about a billion dollars for Karuma,” said Samuel Sejjaaka, the bank’s board chairman.

“A development bank is about infrastructure. It is about roads, dams and the railway line. It is not about micro-finance.”

Sejjaaka made the remarks last week at the closing of a two-day workshop organised by UDB in conjunction with the Association of Development Finance Institutions of Islamic Development Bank (ADFIMI).

The bank is the country’s lone development finance institution and was established in 1972. However, unlike in other countries whose development banks take a lead role in infrastructure financing, the case has not been the same with UDB.

In the recent past, the bank has re-positioned itself as a partner in delivering the key aspects of the National Development Plan.

Aston Kajjara, the state minister for privatisation, assured UDB of government support.

“We are aware that the bank would be miles ahead from what it is today, but because of the past mistakes, the bank is almost starting anew,” he said.

Kajjara said the role of private public partnerships (PPPs) is critical today more than ever as governments worldwide are turning to such arrangements to deliver goods and services to their populations.

“Worldwide, people are implementing infrastructure projects (using PPPs), yet for us, we are just developing a policy and yet to develop the necessary legal framework,” he noted.

The PPP bill was tabled before Parliament recently.

Sejjaaka hailed the workshop, in which participants discussed the role of PPPs in mobilising funds for infrastructure, as a move in the right direction.

“It is sad that we are only beginning to talk about PPPs. America was built on PPPs,” he said.

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