Uganda Development Bank (UDB) has announced a Shs150 billion financing program to provide affordable and patient capital to Ugandan contractors.
Dubbed the Ugandan Contractors Financing Initiative, the program will offer financing along with business advisory and project management services. This will help contractors access bid bonds and guarantees on favorable terms to support their growth.
UDB Managing Director Patricia Ojangole announced the initiative at a press conference on Monday. She said limited access to patient, affordably priced working capital remains a major challenge for Ugandan contractors.
“Financing difficulties and sourcing funds from unconventional sources negatively impacts performance, causes contract delays, and can lead to poor quality work,” Ojangole explained.
She added, “UDB recognizes the need to provide targeted financial support to emerging and existing contractors to aid their growth. This demonstrates our commitment to championing development programs aligned with our mandate.”
Ojangole noted contractors play a vital role in Uganda’s development by turning plans and investments into infrastructure, services and facilities that benefit communities. Therefore, UDB wants to help contractors capitalize on opportunities.
UDB has called for expressions of interest from Ugandan-registered contractors with majority local ownership. Eligible firms must undertake physical infrastructure projects in UDB’s priority sectors.
Under the initiative, contractors can access:
- Timely, cheaper, patient capital
- Lower appraisal fees
- Grace periods up to 12 months
- Interest rates below market rates
- Favorable bid bonds, performance guarantees
- Business advisory services on technical and project management skills.
UDB has partnered with professional engineering and contractor associations to support program implementation.
Ojangole concluded, “We remain committed to Uganda’s development agenda. This initiative marks a new era in infrastructure finance. I urge all contractors to embrace it as we reshape financing for national growth.”
The expression of interest is open from October 3 to 30, 2023. An evaluation committee will assess applications. Eligible contractors will be categorized by credit limits.
UDB is Uganda’s national development finance institution mandated to accelerate socio-economic progress through sustainable financial interventions, especially in priority sectors.