Financing
The Bank obtains two types of funds:
- Trust funds from Government on loan to UDB at specified rates and repayment periods.
- Direct borrowing from multinational financial institutions but guaranteed by Government of Uganda.
Uganda Development Bank is required to finance projects that are technically feasible, commercially and economically viable and socially desirable. Priority is given to:
- Existing projects requiring small assistance to improve their operations
- Projects with a scope to maximize the country’s resources and adding value to the product(s)
- Projects aiming to produce quality products at Internationally competitive prices targeted for export
- Projects creating new job opportunities for the local people.
A significant portion of the financing made by UDB is directed towards projects in the agricultural sector. Financing can be in the form of loans which are repayable in installments over a pre-determined period of time or in the form of equity participation with specific criteria set out on how the equity is shared between UDB and the other investors in the project.
As of April 2009, efforts were underway to recapitalize UDB with a $7.5million capital infusion by the Government of Uganda. This funding was financed by a US$4.5 million loan to Uganda from the Arab Bank for Economic Development in Africa (BADEA) and the Islamic Development Bank (IsDB).
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