Kampala secures €85 million French loan to boost urban water supply

March 12, 2025 in Business, Companies, Infrastructure by Editor

Water utility is promising Kampala residents in the Greater Kampala Metropolitan Area (GKMA), near-term relief from frequent water outages, after securing a loan from the French Agency for Development AFD.

Finance minister Matia Kasaija and Jean-François Arnal, AFD Regional Director for Africa signed the €85 million (approximately UGX 340 billion) agreement at the Ministry of Finance, Planning and Economic Development, Wednesday, March 12.

“Water supply services in Kampala and surrounding areas have been constrained,” Kasaija acknowledged, attributing the problem to rapid urbanization and industrial growth that has outpaced investment in critical services.

According to NWSC, €45 million (approximately UGX 180 billion) of the total funding will support expansion of the water supply network under the second phase of the Kampala Water Lake Victoria Water and Sanitation Project. The project will build on previous phases that saw upgrades at the Ggaba water treatment complex and the construction of a new treatment plant at Katosi, 40km east of Ggaba.

“This funding will enable us to increase coverage of the intervention, develop the downstream part of the water supply network, and enhance access to safe water for the residents of the Greater Kampala Metropolitan Area,” Kasaija said.

The €45 million soft loan will specifically fund the rehabilitation and extension of the water distribution network in North Kampala, benefiting an additional 1 million people, and include the installation of 2,600 prepaid meters in informal areas.

The remaining €40 million (approximately UGX 160 billion) will fund the Greater Kampala Metropolitan Area Urban Development Program, strengthening the capacity of the Ministry of Kampala Capital City and Metropolitan Affairs and the Kampala Capital City Authority to deliver coordinated infrastructure and services. This portion of the funding will focus on broader urban development needs beyond just water infrastructure.

Kasaija emphasized the propitious timing of the funding, which aligns with Uganda’s economic growth targets. “This financing is timely, as it fits into our strategic aspirations of growing the size of our economy tenfold from the current GDP of $53 billion to $500 billion by 2040,” he said, citing the GKMA’s significant contribution to the national economy.

“We will ensure that the funds are properly and exclusively utilized by the agencies for the activities earmarked,” he pledged.

Beatrice Anywar Atim, Minister of State for Environment, emphasized the importance of ensuring that water reaches the end-users, and the funding will support the expansion of the water network, restructuring, and rezoning. “We have water, but how do we make sure it reaches the end-users?” Minister Atim asked.

The minister also expressed gratitude to international partners for their support and looks forward to expanding the partnership to other areas, including Masaka and beyond. “We are grateful for the support, but we are also looking forward to expanding our partnership to other areas, including Masaka and beyond.”

Additionally, the Ugandan government has requested further funding of 150 million euros to support the expansion of clean water services.

Minister Atim also emphasized the need for Ugandans to protect their water sources by avoiding activities that contaminate or destroy them. “I direct Ugandans to vacate wetlands… Let’s take responsibility to make sure that we protect our water sources, that we don’t dump, that we don’t contaminate our water source. Our water source is wealth that must be protected by all Ugandans. People should stop tampering with the catchment area of our water sources, including Lake Victoria. Let’s protect our environment. It sustains the water sources,” she said.

“This project is a testament of the enduring and strong friendship and cooperation between our two countries,” said French Ambassador to Uganda, Xavier Sticker, highlighting France’s commitment to improving Uganda’s water supply through key investments and French expertise.

AFD Regional Director Jean-François Arnal emphasized the agency’s support for Uganda’s Vision 2040 and National Development Plan IV. “I am very honored, as AFD Regional Director, to come and sign the first AFD loans to the Government of Uganda since September 2021,” Arnal said, noting over €400 million in ongoing projects and €300 million in planned pipeline projects.

Arnal also highlighted the importance of the urban development project, which will prioritize climate-resilient urban infrastructure investments. “Considering Uganda’s location, the impact of climate change in urban areas are expected to manifest with an increase unpredictability of rainfall with more frequent and intense rainfall extremes that often result in floodings. The co-financing from AFD in form of €40m is prioritising urban infrastructure investments that build the resilience of the cities against these effects of climate change,” he said.

The AFD loan, on-granted to the National Water and Sewerage Corporation (NWSC), will facilitate an increase in water production to 240 million liters per day, up from the current 160 million liters.

“When we finish Katosi, Sonde, and Naguru, we will have the capacity to produce sufficient water and bring it to the reservoirs.

“We need to increase production to 240 million liters per day and the intake is 240 million liters per day, but the treatment plant can only handle 160 million liters” NWSC Managing Director Eng. Dr. Silver Mugisha explained.

Dr. Mugisha also alluded to plans for additional funding: €80 million (approximately UGX 320 billion) for Kampala, €34 million (approximately UGX 136 billion) for Masaka, and €44 million (approximately UGX 176 billion) for Bara, with AFD’s positive response pending presidential approval.

He underscored the project’s significance in providing clean and sufficient water, particularly in areas like Kawempe. “This project will ensure that whoever is not getting water, especially in the north-eastern part of Kampala, will get sufficient water,” Mugisha said.

The project scope includes the densification and extension of the water distribution network by approximately 71km of pipework, the construction of three new reservoirs, three booster stations, support facilities, and the extension of water services to 20 informal settlements. It also includes the installation of 2,500 prepaid meters and 1,450 public stand posts.

Executed by Sogea Satom of France with supervision from Artelia and Gauff Consultants Uganda Limited, the project commenced on February 1, 2025, and is expected to be completed by August 1, 2027, benefiting over 3 million people in areas including Kira, Kasangati, Kanyanya, Gayaza Road, and Mutungo.

The KW-LV WATSAN project, with €270 million (approximately UGX 1.08 trillion) in total AFD funding since 2010, aims to provide a pro-poor water utility system, supplying 450,000 people in informal settlements with new standpipes, school, and public toilets.