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Uganda Development Bank Commits UGX 150 Billion to Support Local Contractors

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uganda development bank commits ugx 150 billion to support local contractors
uganda development bank commits ugx 150 billion to support local contractors
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The Uganda Development Bank (UDB) has announced its commitment to provide UGX 150 billion to support Ugandan contractors through the Ugandan Contractors Financing Initiative. This program aims to help local contractors access bid bonds and guarantees more easily and at favorable terms.

Patricia Ojangole, the Managing Director of UDB, explained that a lack of access to capital has been a significant challenge for Uganda’s private sector, including local contractors. In response, UDB identified the need to offer targeted financial support to emerging and existing Ugandan contractors to enhance their performance and growth.

Ojangole emphasized that financial difficulties and delays, as well as sourcing funds from unconventional sources, have negatively affected contractor performance, causing delays in projects and often resulting in subpar work quality.

Under this initiative, contractors will benefit from timely access to affordable capital and receive business advisory services related to technical and project management skills to strengthen their capacities. Additionally, they will enjoy benefits such as lower appraisal fees, grace periods of up to 12 months, lower-than-market interest rates, and access to bid bonds and guarantees on favorable terms.

Elizabeth Muhebwa, the Executive Director of UNABCEC, one of the partners in this initiative, praised UDB for its efforts to alleviate challenges faced by local contractors by providing technical assistance. She emphasized the shared vision of driving economic development through construction excellence.

Andrew Muhwezi, the president of the Uganda Institute Of Professional Engineers (UIPE), highlighted the potential for positive transformation in the infrastructure sector with this initiative in place. He pledged UIPE’s full commitment to its partnership with UDB.

According to Patricia Ojangole, the Ugandan Contractors Financing Initiative marks a new beginning for infrastructure development in Uganda, and she called upon all Ugandan contractors to embrace this opportunity.

The expression of interest for this program began on October 3, 2023, and will close on October 30, 2023. An evaluation committee will review the applications and categorize them based on pre-approved credit limits.