Kampala – The Uganda Development Bank (UDB) has unveiled a significant commitment of Shs150 billion to support and foster the growth of Ugandan contractors through the Ugandan Contractors Financing Initiative. This initiative aims to address the pressing issue of limited access to capital faced by Uganda’s private sector, particularly local contractors.
The announcement was made by Patricia Ojangole, the Managing Director of UDB, who emphasized the bank’s dedication to identifying and resolving challenges faced by the private sector within the scope of its mandate.
Ojangole explained, “UDB has a role in trying to identify what the challenges are and providing solutions within the specific role and mandate of the bank. To this end, the bank identified a need to provide targeted financial support to emerging and existing Ugandan contractors to aid their performance and growth.”
Limited access to capital has been a significant obstacle for contractors, resulting in financing difficulties, delays, contract postponements, and, at times, compromised project quality. To address these issues, UDB is offering a range of benefits to contractors, including timely access to affordable and patient capital and business advisory services focused on technical and project management skills to enhance capacity building.
Among the key advantages of the Ugandan Contractors Financing Initiative are:
- Lower appraisal fees
- Grace periods of up to 12 months
- Interest rates lower than prevailing market rates
- Access to bid bonds, performance bonds, and other guarantees at favorable terms and conditions
- Unsecured bid bonds
- Low commission rates
Elizabeth Muhebwa, the Executive Director of UNABCEC (Uganda National Association of Building and Civil Engineering Contractors), applauded UDB for the initiative and its commitment to alleviating challenges faced by local contractors through technical assistance.
Andrew Muhwezi, the President of the Uganda Institute of Professional Engineers (UIPE), expressed optimism that the initiative would lead to a positive transformation in the infrastructure sector. He pledged UIPE’s full support and cooperation in UDB’s partnership to facilitate this transformation.
According to Patricia Ojangole, the Ugandan Contractors Financing Initiative represents a new era and a cornerstone of infrastructure development in Uganda. She called upon all Ugandan contractors to embrace this initiative as it reshapes financing for development in the country.
UDB has announced that the expression of interest for the initiative will open on October 3, 2023, and close on October 30, 2023. An evaluation committee will review the applications against the minimum requirements, and successful applicants will be categorized based on pre-approved credit limits.
This initiative by UDB is expected to provide a significant boost to Uganda’s construction industry and empower local contractors to undertake and complete projects efficiently and effectively.