The Abu Dhabi Fund for Development (ADFD) has approved a Dh40 million ($10.8 million) concessionary loan for the development of a rural electrification project in Kalongo, Uganda, a media report said.

Mohammed Saif Al Suwaidi, director-general of ADFD, and Ajedra Gabriel Gadison Aridru, Uganda's Minister of State for Finance Planning and Economic Development, signed the loan agreement at the ADFD headquarters in Abu Dhabi, UAE, reported Emirates news agency Wam.

Aimed at electrifying homes, schools, healthcare centres, government offices and commercial, industrial and agricultural establishments, the project seeks to help the government achieve its objective of meeting the rural electricity demand that currently stands at less than seven percent to 26 per cent by 2022.

Set to benefit 20,634 consumers over the next 10 years, the rural electrification project is anticipated to improve the living standards of the rural population and minimise migration to cities.

Al Suwaidi said: "The UAE, through the Abu Dhabi Fund for Development, pursues an active policy of supporting sectors that can accelerate economic development across emerging countries. Among these sectors, energy is of great significance, given its crucial role in poverty eradication and inclusive development. At ADFD, we are committed to supporting the government of Uganda in fulfilling its development objectives through ensuring timely and adequate funding for strategically important projects."

The 33kV rural electrification project involves civil and electrical works for the installation of a 139-kilometre transmission line, as well as 88 distribution stations and 415 volts’ distribution lines on a 167-kilometre stretch that will bring electricity to about 2,000 consumers. The project supports the development of small industries, workshops and agricultural units in rural Uganda, while curbing the over-exploitation of vegetation as a source of energy.

In turn, Aridru praised the UAE for its leading development efforts, and acknowledged the important role ADFD has played in advancing sustainable growth in key sectors in Uganda. He explained that this electrification project will go a long way in supporting the Ugandan government in achieving its development priorities.

ADFD’s engagement in the development of Uganda dates back to 1977. Since then, the fund has extended Dh79 million in loans and government grants towards the development of a number of projects that have positively transformed the livelihood of a sizable rural population and the local economy.