The government will borrow ¥1bn ($146.7m) from the Export-Import (Exim) Bank of China to finance the fifth phase of a project aimed at building a national backbone infrastructure connecting government and public sector offices and institutions, the Ministry of Finance said Monday.
The ministry said the government had submitted a proposal to parliament seeking approval for the loan, which will fund the laying of 3,604 kilometres of fibre optic cable and the construction of 51 transmission sites, with the aim of increasing the coverage of the backbone network to 83 per cent.
The first three phases of the National Data Transmission Backbone Infrastructure and e-Government Infrastructure project (NBI/EGI) — implementation of which began in 2006/2007 — were financed by concessionary loans from the state-owned Exim Bank of China. For the fourth phase, the government approached the World Bank, which provided a loan of $75.8mn.
The project aims to establish a secure national backbone infrastructure with high-bandwidth data connectivity in major towns, connect all government ministries, departments, and agencies on a single wide area network, and to set up a government data centre and district information centres.
In the first three phases of the project, 2,294km of fibre was laid, while in the fourth phase, a total of 1,606km of broadband fibre was laid, of which 842km was in the “underserved remote north-eastern parts” of the country. In addition, 400 institutions have been connected to the government network so far.
Some media were quick to link the announcement to the World Bank’s decision to suspend new funding to the government over May’s anti-gay bill. Reuters, for example, suggested that Uganda had turned to China after failing to secure a loan from other sources, including its traditional “biggest development lender.”
In fact, China has been involved in the project since its inception. Not only did its Exim Bank fund the first three phases, but the project’s contractor, Huawei, was a Chinese company (undoubtedly a precondition for the loan). Uganda and China were discussing funding for the fifth phase of the project months before the anti-gay law was passed and the World Bank announced its decision.
What’s more, the Bank is already funding another project — the Uganda Digital Acceleration Project – GovNet (UDAP) — that feeds into the national fibre project. “UDAP is a continuation of RCIP-5,” the Bank said in 2021, referring to its project name for the fourth phase of NBI/EGI. The funding includes a concessional loan of $140mn and a grant of $60mn.
