The government has saved taxpayers billions of shillings after successfully renegotiating the financing terms for the Jinja-Mbulamuti-Kamuli-Bukungu Road and Jinja City Roads project.
Following fresh discussions between the government and financial partners, the cost of the major infrastructure project has been reduced by more than UGX97.44 billion.
The savings were achieved after the Ministry of Finance, Planning and Economic Development reviewed the financing requirements and negotiated better terms with Citi Bank and the Africa Trade Investment Development Insurance (ATIDI).
Finance Minister Henry Musasizi revealed the development while presenting a loan proposal before Parliament during the plenary sitting held on August 6, 2026.
Musasizi informed legislators that the government is seeking approval to borrow up to Euro207.77 million, equivalent to about UGX892.6 billion, to finance the design and construction of the roads project.
The project involves upgrading the 127-kilometre Jinja-Mbulamuti-Kamuli-Bukungu Road as well as constructing 10 kilometres of roads within Jinja City.
According to the minister, the revised financing arrangement reduced the project cost from the earlier Euro230.45 million loan approved by Parliament in October 2025.
He explained that the government saved Euro22.68 million, equivalent to approximately UGX97.44 billion, through negotiations with the lenders and insurance providers.
“My Ministry, in consultation with the Ministry of Works and Transport, reviewed the financing requirements and undertook extensive consultations and negotiations with Citi Bank and Africa Trade Investment Development Insurance,” Musasizi said.
He added that the discussions resulted in reduced financing requirements for civil works and improved financing conditions for the project.
The original loan approval by Parliament on October 30, 2025, allowed the government to borrow up to Euro230.45 million from Citi Bank to support the road construction project.
However, after the approval, Citi Bank informed the Ministry of Finance that changes in the lending policy of Sinosure affected the original financing arrangement.
Sinosure, a Chinese export credit insurance provider, reportedly changed its policy to only support non-revenue projects whose financing needs do not exceed Euro100 million.
The Jinja-Mbulamuti-Kamuli-Bukungu Road project required funding above that limit, making the previous arrangement difficult to implement under the earlier guarantee structure.
As a result, the Ministry of Finance engaged Citi Bank again and secured a new financing structure involving ATIDI as the insurance cover provider.
Musasizi told Parliament that the revised agreement would allow the government to proceed with the project while reducing the financial burden on taxpayers.
The road project is expected to improve connectivity between several districts and create an alternative transport route linking different parts of the country.
The terminal point of the road at Bukungu provides access to districts including Amolatar, Kaberamaido, Soroti, Nakasongola and Kayunga.
The government says the road will also support trade, movement of goods and economic activities in areas surrounding Lake Kyoga.
Documents presented to Parliament indicate that the total estimated project cost now stands at Euro207.77 million, with funding divided into two facilities.
Citi Bank will provide Euro179.26 million, including insurance coverage under the ATIDI-backed loan arrangement, while another Euro28.51 million will be provided under commercial terms to cover land compensation and supervision costs.
The civil works contract worth UGX649.5 billion was signed with M/S Power China International Group Limited on March 15, 2023, for the design and construction of the Jinja-Mbulamuti-Kamuli-Bukungu Road and Jinja City Roads.
The government says the renegotiated agreement demonstrates efforts to reduce public expenditure while ensuring that key infrastructure projects continue to be implemented across the country.
