Minister of Finance Matia Kasaija has expressed anger over Ministry of energy’s failure to utilise 36 million dollars meant for the Electricity Sector Development Project
The project is a World Bank sponsored project aimed at improving the reliability of and increase the access to electricity supply in different parts of Uganda.
In a June 21 letter to minister of energy Irene Muloni, Kasaija expressed dismay that the sector could fail to utilize the money when the sector has a lot of financing deficits.
“It is extremely disappointing that your sector failed to produce bankable project proposals when the sector is financing deficits,” reads the letter in part. “I would like to remind you that projects like the electrification of industrial parks notably, Kapeeka, Sukulu and Mbale and many other transmission lines remain unfunded.” Kasaija adds.
The letter was written following a June 1 letter from the ministry’s Permanent secretary asking the ministry of finance to initiate the cancellation process of the unutilized funds.
The issue of failure to utilize funds in the ESDP project in particular and other sectors in general is not new.
In 2016, the Auditor General in his report to Parliament said that the government failed to utilize funds amounting to USD 120m for the same project. The funds were a loan obtained from the International Development Association (IDA)
“A review of the loan status revealed that the loan whose closing date was projected to be 28th February 2017 has had a low disbursement rate.” Reads the report in part. “Of the loan amount of USD 120 Million, only USD.12,990,465 (10.83%) had been disbursed by end of the 2015 financial year.”
The Auditor General was concerned that such underutilization of funds negatively affects project implementation and inflicts unnecessary costs on the government in commitment fees for any outstanding loan balances.
Uganda was incurring more than shs.15 trillion in commitment fees as at the end of 2017.