Stanbic Bank, Uganda’s leading financial institution, has and continues to be a key partner supporting the upgrade and modernisation of Uganda’s infrastructure through the provision of Bank guarantees, Letters of Credit, purchase of Government bonds and holding Escrow accounts for contracted parties. These off-balance sheet financial solutions worth over one trillion shillings in 2017, have facilitated Government of Uganda to implement multiple large scale national infrastructure projects, reduced transactional risk and accelerated project execution.
Stanbic supported Government of Uganda on the 2.2 billion dollar Karuma Hydro Dam project, working as the lead bank in a consortium of financial institutions that arranged a debt swap of 645 million dollars out of a 1.4 billion dollar 15 year loan to Government from the EXIM bank of China.
Under the terms of the swap the interest rate for this portion of the debt is now fixed for the loans duration. Ministry of Finance officials estimate that Uganda stands to save up to 100 million US Dollars if the average interest rate of the previous 15 years is used as a reference.
Once completed Karuma Dam will produce 600 MW of electricity or 44% of all power generation in the country. Enough power to provide electricity for 360,000 homes. This additional capacity will go a long way towards securing Uganda’s energy future and enable Government to significantly expand the reach current national grid. The country will also be in position to export the excess power to neighbouring countries.
Isimba dam is expected to add 183.2 megawatts increasing country’s total generation capacity by 23%]
"Isimba is expected to generate hydroelectric power at 68 cents per kWh, the lowest in East Africa"
Isimba Dam is one of the largest hydropower projects the Ugandan Government has embarked on in the past five years. Our involvement in the project included providing the Letters of Credit that allowed the main contractor to import the much needed raw materials needed in the construction. In addition the bank supported many of the project’s local subcontractor’s with invoice discounting services and improved access to salary payments for the 1,000 project workers by setting up a standalone ATM onsite.
Scheduled for completion within 2018 the 550 million USD power project is expected to add 183.2 megawatts of power to the national grid thereby increasing the country’s total generation capacity by 23%. More importantly Isimba is expected to generate hydroelectric power at 68 cents per kWh, the lowest in East Africa. This should go a long way towards helping Government achieve its national objective of making end-user tariffs a lot more affordable.
Entebbe Airport expansion project
Stanbic bank plays a critical role in the 200 million USD Entebbe Airport expansion project as the escrow account holder between the Government of Uganda and the main contractor. The bank will also provide revenue collection services for the Civil Aviation Authority once the project is complete which will help facilitate repayment of the loan. The Airport project includes expansion of the main passenger terminal, construction of a new cargo centre and refurbishment of the airport’s two runways. With a projected completion date of 2033 Entebbe will be capable of handling 100,000 tons of cargo, 930 arriving passengers and 820 departing passengers during peak hours.
Sumitomo Road Construction Equipment procurement
The Sumitomo project was conceived by Government in order to achieve the objective of building district level self-sufficiency in road construction and maintenance across the country. To make this possible a decision was taken to put in place a single source procurement of suitable road construction and maintenance equipment.
By doing so, equipment specifications would be aligned and established on a country wide basis. Procurement and stock keeping of spares would be made easier, and long term maintenance of equipment could be made cost effective and sustainable.
Stanbic Bank’s participation in the project involved providing a 45 million dollar performance guarantee that facilitated the procurement of the 1,150 units of road construction equipment worth 150 million US Dollars. This included items such as graders, bulldozers, wheel loaders, compacting rollers, tipper trucks and their essential spares. Procurement of the equipment was facilitated under a loan agreement entered between the Government of Uganda, the Japanese Bank for International Cooperation (JBIC) and Sumitomo Corporation a leading and worldwide operating Japanese trading house. Sumitomo has since set up permanent offices in Uganda employing 11 highly skilled Ugandan technical experts who were trained in Japanese machine maintenance and operations as part of a nine million dollar service contract.
Kampala-Entebbe Express Way
Stanbic Bank holds the escrow account between the Government of Uganda and the main contractor. The 476 million Dollar 53 km Express way will link Entebbe - Kampala with a 14km spur to Munyonyo. As a limited access highway, the four lane toll expressway will provide a faster and much needed alternative to the single lane Entebbe road, which is normally heavily congested, turning what should be a brisk 45 minute transit into a gruelling three hour plus journey. Once completed in 2018
Stanbic will provide revenue collection services for UNRA on the expressway thus helping facilitate repayment of the project loan.