{UAH} Uganda In Final Stages on new airport credit of up to 325 million euro
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2:36 AM |
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Uganda said on Thursday it hopes to close a loan deal of up to 325 million euros (£282.1 million) this month with a UK government credit agency and Standard Chartered Bank (STAN.L) for an international airport to service its oil industry.
Crude oil reserves were discovered in the east African country's Albertine rift basin near the border with the Democratic Republic of Congo more than 10 years ago.
A series of setbacks, however, including a lack of infrastructure and wrangling over taxes and development strategy for the fields, have repeatedly delayed the start of production.
Tony Kavuma, chief mechanical engineer at the Ministry of Works and Transport, says that Uganda has already held preliminary talks with UK Export Finance, the UK government's export credit agency, and Standard Chartered Bank for a loan of 310-325 million euros.
He said the Ministry of Finance and the two financing organisations were negotiating the final terms of the loan agreement and signing was expected by the end of June.
"We want to have this airport operational by June 2019. It's a very tight schedule…we need it (the airport) like yesterday," Kavuma said.
The facility will be Uganda's second international airport after Entebbe, which is located on the shores of Lake Victoria, south of the Ugandan capital Kampala.
It will serve chiefly to transport equipment and goods for the oil industry.
Last month Uganda and Tanzania signed a framework agreement for a proposed $3.55 billion crude export pipeline, clearing the way for a project crucial if Uganda is to meet its oil production commencement target of 2020.
Uganda is also planning to construct a refinery near the oil fields to help process domestically some of its crude reserves, which are estimated at 6.5 billion barrels. Of that, 1.4 billion to 1.7 billion barrels are considered recoverable.
Both the refinery and the airport are to be located in a 29 sq km (11 sq mile) area in the rift basin, near the oilfields.
Kavuma said the airport was deemed necessary after potential investors in the refinery and other oil-related projects voiced concern that Uganda's narrow and weak roads would complicate the transportation of heavy loads and equipment.
The loans would be used to finance the first phase of the airport and the government would borrow another 215-280 million euros to finance a second phase, he said.
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