Uganda Secures $540 Million World Bank Funding to Boost Urban and Refugee-Hosting Areas
Kampala — In a major step toward addressing urban growth and supporting refugee-hosting communities, Uganda has secured $540 million (approximately 2.1 trillion Shillings) in funding from the World Bank. The six-year Uganda Cities and Municipalities Infrastructure Development (UCMID) programme aims to transform ten cities, 26 municipalities, and 13 refugee-hosting districts by improving urban management, expanding climate-resilient infrastructure, and creating jobs.
The funding, provided through the World Bank’s International Development Association (IDA), includes a $429 million credit, an $80 million grant, and a $31 million shorter-maturity loan. This investment builds on the success of its predecessor, the Uganda Support to Municipal Infrastructure Development (USMID) programme, which wrapped up in 2024 after making significant strides in sustainable urban development.
Tackling Urban Challenges
Uganda’s rapid urbanization has brought both opportunities and challenges. Currently, 27% of the country’s population resides in urban areas, a figure expected to surpass rural populations in the coming decades. However, unplanned urban sprawl has led to environmental degradation, increased flooding, and higher infrastructure costs.
“With Uganda’s urban population projected to more than double in the next two decades, it is essential that this rapid expansion translates into productive jobs for a youthful labor force rather than resulting in fragmented urban sprawl and increased informality,” said Francisca Ayodeji (Ayo) Akala, World Bank Country Manager for Uganda.
The UCMID programme seeks to address these issues by delivering climate-smart infrastructure such as all-weather roads, stormwater drainage systems, street lighting, and public markets. These improvements are expected to enhance mobility, reduce flood risks, and improve public safety while stimulating local economic activity.
Supporting Refugees and Host Communities
A unique aspect of UCMID is its focus on refugee-hosting districts, which are home to thousands of displaced individuals. The programme aims to strengthen services and livelihoods in these areas, ensuring that both refugees and their local hosts benefit from safer, more productive towns and cities.
“Importantly, the programme will also strengthen services and livelihoods in refugee-hosting areas, so that refugees and their hosts can benefit together from safer, more productive towns and cities,” Akala added.
Job Creation and Economic Growth
The initiative is also expected to generate significant employment opportunities. At least 40,000 direct jobs are anticipated, including 20,000 permanent positions in operations and services, and an equal number of temporary jobs during the construction phase. Improved infrastructure and local economic development are expected to catalyze additional private sector employment in the long term.
Building on Past Success
UCMID follows in the footsteps of USMID, which launched in 2013 and targeted 14 municipalities and 11 refugee-hosting districts. Under USMID, over 215 kilometers of all-weather roads were constructed, 1,800 street lights were erected, and more than 40 kilometers of cycling, bus, and parking infrastructure were installed. A 2021 community satisfaction survey revealed a 94% approval rate for the programme.
Isaac Mutenyo, USMID’s national coordinator, highlighted the programme’s success across Uganda’s four regions. “From Arua spanning across to Kabale in the far west, to Busia in the far east, Ugandans have felt the benefits of the programme,” he said.
Expanding Reach
While USMID focused on 14 municipalities, UCMID will expand its scope to include an additional 15 municipal governments: Bugiri, Bushenyi-Ishaka, Ibanda, Iganga, Kapchorwa, Kisoro, Kotido, Koboko, Kumi, Masindi, Mityana, Nebbi, Njeru, Rukungiri, and Sheema. The programme will also benefit 13 refugee-hosting districts, including Adjumani, Arua, Isingiro, Kamwenge, and Kikuube, among others.
Cities such as Arua, Fort Portal, Gulu, Hoima, Jinja, Lira, Mbale, Mbarara, Masaka, and Soroti will also see improvements under UCMID.
A Collaborative Effort
The Ministry of Lands, Housing, and Urban Development, in partnership with the Ministry of Local Government, will lead the coordination and implementation of UCMID. This collaborative approach aims to ensure the programme’s success and sustainability, aligning with Uganda’s National Development Plans.
As Uganda continues to urbanize, the UCMID programme represents a critical investment in the country’s future, addressing both immediate challenges and long-term opportunities for growth and development.
— Reported by Nexio News
