AFDB grants $500,000 for capacity development of petroleum MSMEs in pipeline corridor
The Government of Uganda alongside the African Development Bank has completed a $500,000 grant agreement for the financing of MSMEs to boost business linkages which are part of the East African Crude Oil Pipeline Technical Assistance project.
The project intends to help local Uganda and Tanzania-based MSMEs gain market access to opportunities while building linkages with larger national, regional, and international companies. This project will boost private sector growth and create over 500 jobs in the new pipeline.
The bank will then contribute $500,000 through its Fund for African Private Sector Assistance (FAPA) project. The government of Uganda through its Petroleum Authority will offer counterpart funding. Another project of a similar magnitude is on the verge of completion on Tanzania’s border.
This grant was in response to a request made by Uganda and Tanzania when asking for help in preparing their local businesses to retain a portion of the $3.5 billion investment from the construction of the crude oil pipeline from Hoima (Western Uganda) to Tanga (Tanzanian coast). This agreement was sealed in 2016 and has been followed by a September-2020 intergovernmental deal granting Total E&P rights as the top private sector developer.
The deal aims to nurture 100 Tanzanian and Ugandan microbusinesses with the opportunity of working on the project. It will also link an additional 70 business enterprises taking place on the pipeline. As new enterprises join petroleum supplier databases in both Tanzania and Uganda, the project is expected to create an additional 500 jobs.
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