On Tuesday, 16th September 2025, Uganda’s Committee on National Economy urged the government to review its proposed €183.3 million loan from Standard Chartered Bank alongside Shs120.4 billion domestic borrowing for the Strategic Towns Water Supply and Sanitation Project – Phase II. The meeting, chaired by Deputy Speaker Thomas Tayebwa, followed a motion by Minister of State for Finance Hon. Henry Musasizi.
The project aims to expand clean water and sanitation access to rapidly growing urban populations, benefiting 740,000 people by 2030 and projected to reach one million by 2050. Key industrial players such as cassava processing plants and industrial parks will also benefit. The project covers 51 towns across four clusters and includes urban water supply, sanitation infrastructure, and project management.
However, committee chair Hon. John Bosco Ikojo expressed concern regarding the loan’s commercial terms, with a grant element of only 7%, below the IMF/World Bank’s 35% concessionary threshold. The repayment burden could reach €311.5 million over 14 years. The committee questioned the high domestic borrowing rate of 12.1% and a costly €15.7 million insurance premium to SINOSURE.
The committee recommended renegotiating loan terms, drawing lessons from Phase I which faced procurement delays, compensation issues, and costly consultants. Strengthening in-house capacity and carefully reviewing project scope were also advised to avoid overruns and improve management.