April 03, 2013 – The World Bank Board of Executive Directors have approved an International Development Association (IDA) credit of US$150 million to finance urban infrastructure and improve service delivery in 14 municipalities in Uganda.
The 6-year Uganda Support to Municipal Infrastructure Development (USMID) project will expand urban infrastructure, and enhance the capacity of the 14 municipal local governments to generate own source revenues, improve urban planning, and strengthen financial management, procurement, environmental and social systems.
The 14 municipalities that will benefit from the project are geographically spread across the country and include: Arua, Gulu, Lira (Northern Uganda); Soroti, Moroto, Mbale, Tororo, Jinja (Eastern Uganda); Entebbe, Masaka (Central); Mbarara, Kabale, Fort Portal and Hoima (Western Uganda).
“We chose these 14 out of the 22 municipalities to reflect regional balance, and also because 13 of them have demonstrated capacity to handle the increased investments under the program,” said Martin Onyach-Olaa, Senior Urban Specialist at the World Bank in Uganda. “Hoima was chosen specially because of its location in the Albertine Graben Region, potentially making it an oil city in the medium term”.
The Government’s current Local Government Management and Service Delivery Program (LGMSDP) does not provide the municipalities with adequate funds to meet their strategic infrastructure investment needs.
The USMID will be delivered under a special instrument known as the Program-for-Results or PforR, which is an innovative new financing instrument for the World Bank’s client countries that links the disbursement of funds directly to the delivery of defined results. This is the third PforR for Africa after the ones for Tanzania Local Government and a health project in Ethiopia.
“Money will only be released once the results have been delivered and verified. It will demand greater accountability from the implementing local governments while at the same time it will help them to continue to deliver sustainable results long after the Bank’s involvement has ended,” said Moustapha Ndiaye, World Bank Country Manager for Uganda.
The Program will also involve a range of administration, oversight and support activities to be undertaken by the relevant central government entities. The Government of Uganda is contributing $10 million in counterpart funding to the project from its current Local Development Grant (LDG) funding to municipal LGs under the current LGMSD program.
The 14 municipalities will have significant discretion in selecting priority projects from a menu including roads and associated infrastructure; liquid and solid waste management; water and sewerage; local economic infrastructure (e.g. markets); and urban transport (e.g. bus terminals).
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