Notice

Category A project supported: Kampala Industrial and Business Park, Uganda

Published 3 June 2020

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1. Project description

UK Export Finance (UKEF) has agreed to provide support to Uganda Ministry of Finance, Planning and Economic Development to facilitate the development of the Kampala Industrial and Business Park Infrastructure Project. The Uganda Investment Authority will be responsible for the development of the Project and Lagan-Dott Namanve Ltd (‘the Exporter’) will provide construction services for the Project in a design and build contract.

The Kampala Industrial and Business Park (KIBP) is located approximately 11 km east of central Kampala. The KIBP covers an area of approximately 890 hectares (8.9 km2) and the Government of Uganda plans for it to become a model industrial park for the rest of the country. The KIBP has been divided into four Sectors in order to facilitate development in a staged approach: North, South A, South B and South C Sectors.

The Project comprises the following main elements within the existing KIBP:

  • road infrastructure, including a grade separated junction along the Kampala-Jinja road, to connect the North Sector and South A Sector of the KIBP and improvements to primary and secondary distributor roads within the KIBP
  • water supply infrastructure within the KIBP
  • solid waste and wastewater infrastructure for the KIBP
  • power supply, including provision of internal power distribution network that connects with the national network, including sub-surface cables, feeder lines, transformers and a substation
  • communications and ancillary infrastructure

The Project does not include any associated facilities[footnote 1].

2. Project sector

The Project is in the civil construction sector.

3. Project sponsors

The Project is being developed by the Uganda Investment Authority, a semi-autonomous government agency for the Government of Uganda. Lagan-Dott Namanve Ltd will provide construction services for the Project in a design and build contract.

4. UK exporters

Lagan-Dott Namanve Ltd.

5. Export credit agent bank

Standard Chartered Bank.

6. Amount of UK Export Finance support

The principal value of the support is approximately 220 million euros.

7. OECD Common Approaches and Equator Principles

UKEF categorised the Project as a Category A (having potentially significant environmental, social and human rights (ESHR) impacts) in accordance with the definition in the 2012 (Revised 2016) OECD Common Approaches for Officially Supported Export Credits and Environmental and Social Due Diligence (the “OECD Common Approaches”).

As required by the OECD Common Approaches, UKEF disclosed its potential involvement in the Project. A notification was posted on the UKEF website on 6 August 2019, which provided a description of the Project, a contact point to signpost interested parties to environmental and social information, and links to a non-technical summary and the environmental impact assessment. No enquiries were received by UKEF or the contact point as a result of this notification.

8. Environmental, Social and Human Rights (ESHR) Standards

Project related ESHR documentation was reviewed for alignment against the 2012 International Finance Corporation (IFC) Performance Standards (PS) on Environmental and Social Sustainability and the World Bank Group Environmental, Health and Safety (EHS) Guidelines. The applicable IFC PS and World Bank Group EHS Guidelines were:

  • PS1: Assessment and Management of Environmental and Social Risks and Impacts
  • PS2: Labour and Working Conditions
  • PS3: Resource Efficiency and Pollution Prevention
  • PS4: Community Health, Safety and Security
  • PS5: Land Acquisition and Involuntary Resettlement
  • PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources
  • PS8: Cultural Heritage
  • World Bank Group General EHS Guidelines

9. Nature of ESHR impacts

The review of potential ESHR risks and impacts took into account the following impacts, receptors and issues during the construction and operational phases of the Project:

  • noise and vibrations
  • hazardous material management
  • waste
  • air emissions
  • water quality
  • wastewater
  • terrestrial and avifaunal biodiversity, including species of conservation concern
  • livelihood impacts, especially to informal users of the KIBP
  • management of third-party contractors and suppliers
  • grievance mechanisms
  • occupational and community health and safety
  • emergency planning and response
  • cumulative impacts
  • worker welfare
  • cultural heritage
  • visual impacts
  • community engagement

10. Assessment of ESHR impacts

A review was undertaken in line with the requirements of the OECD Common Approaches to identify potential ESHR risks and impacts of the Project and how these would be effectively managed.

The review included:

  • cesk-based review of project-related documentation: Environmental and Social Impact Assessment, Environmental and Social Management Plan, Stakeholder Engagement Plan, and Livelihood Restoration Plan
  • site visit to the Project area, including interviews and meetings with relevant personnel
  • follow-up meetings and interviews with relevant Project representatives

The results of this review formed the basis for the evaluation of the Project’s alignment with relevant international standards, and recommendations for future compliance and monitoring.

11. Decision

Various actions have been agreed between the Project developers, operators, and parties involved in the financing, which are necessary to ensure the project’s on-going alignment with international standards. Following agreement of these commitments, it was concluded that the project should meet the relevant international standards over the project cycle and UKEF therefore decided to provide its support in respect of the supply of capital goods and services by UK exporters to the Project.

A condition of support is that the Project will be subject to assurance monitoring by an IESC, in order to provide satisfaction that the Project is aligned with the relevant international standards throughout the duration of support.

UK Export Finance

####June 2020

  1. OECD Common Approaches defines “Associated Facilities” as: those facilities that are not a component of the project, but that would not be constructed or expanded if the project did not exist and on whose existence the viability of the project depends; such facilities may be funded, owned, managed, constructed and operated by the buyer and/or project sponsor or separately from the project. ↩

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