Uganda Development Bank (UDB) has unveiled a substantial financial commitment of Shs150 billion to launch the Ugandan Contractors Financing Initiative. This initiative aims to provide accessible and patient financing to Ugandan contractors, along with valuable Business Advisory and Project Management services.
One of the primary challenges faced by Ugandan contractors has been limited access to reasonably priced working capital. Patricia Ojangole, the Managing Director of UDB, emphasized that this difficulty, along with delays in securing funds from unconventional sources, has had detrimental effects on contractors’ performance, business growth, project timelines, and overall work quality.
To address these challenges, UDB is inviting Ugandan contractors to express their interest in participating in this financing initiative. Eligible firms must be registered in Uganda and majority-owned by Ugandans, focusing on physical infrastructure projects within the bank’s priority sectors.
The benefits offered to Ugandan contractors under this initiative are numerous, including timely access to cost-effective and patient capital, reduced appraisal fees, grace periods of up to 12 months, and competitive interest rates below prevailing market rates.
Furthermore, contractors will gain access to bid bonds, performance guarantees, and other essential financial services with favorable terms, such as minimal arrangement fees, security coverage ranging from 50% to 100% of the bond amount, unsecured bid bonds ranging from 0.5 to 1 billion Shs, and low commission rates of 0.5% per quarter, among others.
UDB has collaborated with the Uganda Institution of Professional Engineers (UIPE) to provide guidance and direction on engineering-related policies and public interest matters.
Additionally, the Uganda National Association of Building and Civil Engineering Contractors (UNABCEC) will play a role in supporting the mobilization and due diligence processes.
The Expression Of Interest period for participation in this initiative commenced on October 3, 2023, and will conclude on October 30, 2023.
Ugandan contractors are encouraged to take advantage of this opportunity to access affordable and patient financing, which will ultimately contribute to the growth and development of the construction industry in Uganda.