Uganda Development Bank Limited (UDB) and the African Development Bank (AfDB) have signed an agreement for funding worth US$20 million (about Shs74 billion). The signing ceremony took place on Wednesday at UDB’s Head Office at Rwenzori Towers, Nakasero.

This follows the approval by parliament earlier this year, of a sovereign guarantee to secure this funding. The funding, extended to UDB as a line of credit, shall be on-lent to Small and Medium Enterprises (SMEs) and infrastructural projects in Uganda, at favourable interest rates.

The funding is a significant intervention for UDB whose clientele is 90 percent SMEs. The funding will further bolster the Bank’s capacity to provide medium and long-term development financing to business enterprises operating in the priority sectors of the economy as outlined in the country’s national development plan (NDP II) and in line with AfDB’s “High 5” priority areas.  This funding comes along with a technical assistance grant to support UDB in strengthening her institutional capacity and assuring sustainability of the Bank’s operations.

Patricia Ojangole, the Managing Director UDB expressed her pleasure and reiterated the Bank’s commitment to accelerating socio-economic development through sustainable financial interventions. “The Bank continues to register sustained improvements in performance as evidenced by the positive trends in financial performance and development outcomes over the last couple of years; funding partnerships such as these are fundamental to enabling us not only to be a sustainable institution but more importantly enable us fulfil our mandate,” Ms Ojangole said.

Kennedy Mbekeani, the Country Manager African Development Bank expressed his appreciation to the Hon. Matia Kasaija, Minister of Finance, Planning and Economic Development whom he said has been the anchor between the two banks. He pledged his support to working with UDB to build relationships with the beneficiaries of the funding. “We are committed to coming up with innovative ways to support all stakeholders,” he said.

The African Development Bank is a multilateral development finance institution whose overall objective is to support African countries’ economic development and social progress by promoting investment of public and private capital in projects and programmes designed to reduce poverty and improve living conditions.