The Government of Uganda has signed a financing agreement to upgrade the 97-kilometer Lusalira–Nkonge–Lumegere–Ssembabule Road (Package 4) from gravel to a Class II bitumen standard, significantly enhancing regional connectivity and economic integration. The project is valued at approximately Shs534.9 billion ($147 million / EUR 126.44 million), exclusive of VAT.
Under the arrangement, Citibank Uganda serves as the Mandated Lead Arranger, contributing Shs479.8 billion ($132 million), while the Government of Uganda will provide Shs55.11 billion ($15.1 million) in equity and cover applicable taxes. Additional financing will be supported by Absa Bank (Mauritius) Limited, the Development Bank of Southern Africa, and African Trade and Investment Development Insurance.
The works will be undertaken by Tecnovia Group, a joint venture between Tecnovia S.A. of Portugal and Tecnovia Angola, with oversight by the Uganda National Roads Authority. Construction is expected to begin in January 2025 and run for 36 months, with completion targeted for the end of 2027 or early 2028. The road will be upgraded to a Class II bitumen surface and will feature shoulders, drainage channels, culverts, and planned grade-separated intersections and underpasses.
The Lusalira–Nkonge–Lumegere–Ssembabule Road begins in Mubende District at Lusalira, passes through Nkonge, Kabamba, and Lumegere, and ends in Sembabule District. It is set to serve as an alternative corridor linking the Northern Corridor routes of Kampala–Masaka–Mbarara and Kampala–Mubende–Fort Portal. The upgrade is expected to reduce vehicle operating costs, cut travel time, and improve access to social and economic services, while stimulating trade and mobility across the Central Region.
Speaking at the signing ceremony, State Minister for Finance (General Duties) Henry Musasizi emphasized the road’s role in boosting local economies and enhancing national connectivity. Minister of Transport and Works Gen Edward Katumba Wamala called for the inclusion of local contractors and urged compliance with Uganda’s local content laws. The loan facility has a 10-year maturity period with a three-year grace period. Interest is pegged to the six-month EURIBOR plus five percent, with a 2.25 percent insurance premium, bringing the effective rate to approximately 9.08 percent. Additional charges include a 1.75 percent commitment fee, a 1.4 percent arrangement fee, and an annual agency fee of EUR 15,000.
By modernising this strategic 97-kilometer route, the government aims to strengthen economic resilience, improve regional integration, and open up new opportunities for communities along the corridor. The government says the project is part of a wider strategy to transform the country’s road network into a reliable enabler of trade, investment, and socio-economic growth.
