Uganda’s parliament has approved a plan by the government to borrow $358 million to fund new infrastructure projects, including a major electricity transmission line linking Uganda to South Sudan. Finance ministry officials confirmed on Monday that the funding will come from a mix of concessional and commercial loans.
The 400-kilovolt transmission line, to be constructed over the next five years, is expected to boost regional power trade and strengthen Uganda’s role as an emerging electricity exporter. “This investment will help stabilize our grid and open new markets, particularly South Sudan, which has significant unmet energy needs,” a finance ministry spokesperson told Daily Monitor.
The project forms part of Uganda’s broader strategy to leverage its growing electricity generation capacity, driven by new hydropower plants, to support industrialization and regional integration. Energy officials cited by Reuters said the country’s installed power capacity now exceeds 1,300 megawatts, though domestic consumption remains low, leaving room for export.
In addition to the cross-border power line, the borrowing will also finance road upgrades and rural electrification schemes aimed at stimulating economic growth. Lawmakers backing the measure argued that the projects would attract investment and improve trade competitiveness, while critics warned of rising debt risks.
Uganda’s public debt has climbed to over 50% of GDP in recent years, a trend the IMF highlighted in its June 2025 debt sustainability report. Nevertheless, authorities insist that the new borrowing remains within safe thresholds and will yield long-term economic returns.
