March 26, 2010 Signing of Japanese ODA Loan Agreements with the Republic of Contributing to economic growth and poverty reduction through the development of "regional infrastructure", one of the priority issues of the TICAD IV Yokohama Action Plan

1. On March 26, Japan International Cooperation Agency (President: Sadako Ogata) signed two ODA loan agreements to provide up to 8.81 billion yen with the Government of the Republic of Uganda in Kamapala.

2. The Republic of Uganda, with GNI per capita of approximately US$420 (FY2008), is classified as one of the least developed countries (LDC). Since the 1990s, however, it has maintained a real GDP growth rate of more than 5% per year on the average, which indicates stable macroeconomic management. The Government of Uganda formulated its Poverty Eradication Action Plan (PEAP) in December 2004. It recognizes that it is imperative to develop infrastructure and has been taking measures to develop transport and power sectors. In the FY2009 budget of the Uganda Government, approximately 27% of its gross budgetary expenditure is allocated to the infrastructure sector, which proves the government's emphasis on investments in infrastructure for economic growth. Signing ceremony 3. The features of the ODA loan signed this time are:

(1) Promotion of commodity distribution and improvement of the livelihoods of Internally Displace Persons (IDP) in post-conflict reconstruction aresa through road rehabilitation

The road connecting Atiak in northern Uganda and at the border with Sudan will be rehabilitated. This region has experienced over 20 years of armed rebellion by an anti- government army (Lord's Resistance Army), which produced a large number of IDP. At present, public security and order have been restored and the resettlement of IDP has been in progress. The prolonged conflict, however, has caused a delay in the development of living and social infrastructure. It is hoped that the resettlement of IDP will be promoted, which will, in turn, vitalize social and economic activities. Furthermore, "the Upgrading of Atiak-Nimule Road Project" is expected to enhance smooth commodity distribution in Uganda and neighboring countries, thereby improving people's livelihoods.

This is a parallel financing project with the World Bank (WB) which assists the road between and Atiak.

(2) Strengthening a stable supply of power by developing international power transmission lines

"The Interconnection of Electric Grids of Nile Equatorial Lakes Countries Project" supports an increased power exchange across the countries in the region and stable power supply at a lower cost through the construction and expansion of power transmission lines and substations in the five countries around East Africa (Uganda, Kenya, Rwanda, Burundi, and DR Congo). It is expected that Uganda will be able to produce surplus electricity and raise revenues by selling it to its neighboring countries, such as Kenya and Rwanda, which are facing increasing electricity demand.

This Japanese ODA loan is provided to Uganda, while the African Development Bank provides financial assistance to Kenya, Rwanda, Burundi and DR Congo as well as provides loan to Uganda to cover a part of its necessary funds. This project is co-financed with the African Development Bank under EPSA [1].

4. These two projects provide assistance for "regional infrastructure" stated in the TICAD IV Yokohama Action Plan. JICA will continue to provide its assistance for sustainable economic growth and poverty reduction through developing infrastructure in Uganda.

(Reference)

[1] EPSA stands for "Enhanced Private Sector Assistance for Africa”. It is an initiative to provide comprehensive assistance for the private sector development in Africa. Under the Initiative, JICA shall make loans up to one billion dollars in five years co-financing with African Development Bank. This project is the second co-financed project for Uganda on EPSA for Africa after "the Bujagali Interconnection Project.” Reference

Term and Amount of Loan

Interest Rate (% per annum) Procurement Amount (Mil. Repayment Period Project Name Yen) Consulting (years) Consulting Project Project services services

Upgrading of Atiak-Nimule Road 3,395 0.01 0.01 40/10 General untied

Interconnection of Electric Grids of Nile General 5,406 0.01 - 40/10 - Equatorial Lakes Countries Project untied

Total 8,801

(1) Upgrading of Atiak-Nimule Road

Background and Necessity

The conflict which lasted over 20 years in the northern region of Uganda resulted in a large number of IDP. The Government of Uganda announced the Peace, Recovery and Development Plan for Northern Uganda (PRDP) in 2007. Although the Government and donors have started reconstruction assistance for the region, the condition of roads, one of basic infrastructure, is still extremely poor and has been one of the factors preventing socioeconomic activities by IDP who have returned to the region.

Since agriculture is a major economic activity in the region, it is expected that agricultural production and economic activities will be activated once IDP return home. The project, which will facilitate smooth commodity distribution within Uganda and with its neighboring countries, will contribute to the stabilization of the project target area and to peace in the entire country. The upgrading of the road in Uganda is of particular importance to ensure the transportation route from the Port of Mombasa in Kenya and the Port of Dar es Salaam in Tanzania to southern Sudan, DR Congo, Burundi and Rwanda, which depend on the two ports for marine transportation. The project will enhance economic integration with the neighboring countries and economic activities.

Objective and Summary

The objective of this project is to upgrade the road of approximately 36 km between Atiak in northern Uganda and Numule at the boarder with Sudan, thereby contributing to the strengthening of transportation capacity, enhancing economic integration with the neighboring countries, vitalizing economy, improving the livelihoods of residents along the road, and reducing poverty. This ODA loan will be allocated to cover the expenditures for civil works such as expansion of the road width, paving, construction of drains and consulting services.

Executing Agency

Uganda National Roads Authority (UNRA) Address: Plot 11, Yusuf Lule Road, P. O. Box 28487, , UGANDA Tel/Fax: +256-312-²³³¹⁰⁰⁄+256-414-232807

Planned Implementation Schedule

(i) Scheduled project completion: January 2013 (Project is completed when the facilities are opened for use.) (ii) Mailing of letters of invitation for consulting services: March 2010 (iii) Tender announcement of initial procurement package for international competitive bidding on project construction Project package title: Civil work for Atiak-Nimule road Release date: June 2010

(2) Interconnection of Electric Grids of Nile Equatorial Lakes Countries

Background and Necessity

The five countries involved in this project (Uganda, Kenya, Rwanda, Burundi and the Democratic Republic of the Congo) suffer from lack of electricity and its high cost, and there are few people who have access to electricity services. Furthermore, power exchange with the neighboring countries in the area is considerably limited and each country is respectively developing power resources and providing electricity for domestic use. Under such circumstances, these countries cannot import electricity to fill in the gap between domestic power supply and demand and are at risk of load shedding.

Uganda is also faced with a shortage of power at present. However, “the Bujagali Hydropower Project”, one of the largest projects for private sector participation in power generation in Africa, will be completed in 2011 and more power stations will be constructed by utilizing its enormous potential for hydropower in the future. After the completion of “the Bujagali Hydropower Project”, the Government of Uganda plans to expand the export of electricity to its neighboring countries such as Kenya and Rwanda whose power supply capacities are insufficient.

Objective and Summary

The objective of the project is to ensure an efficient and stable power supply at a lower cost in each country of the project by developing power pool interconnections among Uganda, Kenya, Rwanda, Burundi and DR Congo, thereby contributing to the promotion of regional integration and the economic and social development in the respective countries. The Japanese ODA loan under this project is provided toward Uganda and allocated to expenditures for civil works and material/equipment procurement necessary for the construction and expansion of power transmission lines and transformer substations in Uganda.

Executing Agency

Uganda Electricity Transmission Company Ltd (UETCL) Address: Plot 29/33, Amber House, Kampala Road, Kampala, UGANDA Tel: 256-41-233-433, Fax: 256-41-341-789 Planned Implementation Schedule

(i) Scheduled project completion: December 2014 (The time to start the use of facilities shall mark the end of the project.) (ii) Mailing of letters of invitation for consulting services : April 2010 (iii) Tender announcement of initial procurement package for international competitive bidding on project construction Project package title: - EPC contract for Bujagali – Tororo – Lessos (Uganda part) - EPC contract for Mbarara – Mirama – Birembo (Uganda Part) Release date: October 2010