FAMReports News Desk | Kampala-May 26, 2025
Uganda has signed a transformative US$800 million (Shs 3 trillion) Country Engagement Framework (CEF) with the Islamic Development Bank (IsDB), opening the door to ambitious development goals between 2025 and 2027. The milestone agreement, formalized on the sidelines of the 50th Annual Meetings of the Islamic Development Bank Group in Algiers, Algeria, is expected to accelerate economic resilience, climate adaptation, and human development across Uganda.
The agreement was signed by Uganda’s Permanent Secretary and Secretary to the Treasury, Ramathan Ggoobi, and IsDB Vice President Dr. Rami Ahmed.
“This framework aligns closely with Uganda’s aspirations under the 10-fold Growth Strategy,” said PSST Ggoobi. “It prioritizes structural transformation, human capital development, and climate resilience—critical levers for sustained progress.”
A Dual-Pillar Development Strategy
The CEF is anchored on two strategic priorities. The first focuses on the development of climate-resilient infrastructure—particularly in the transport and energy sectors—designed to foster structural economic transformation. It will also address food security by enhancing agricultural productivity and increasing Uganda’s export base.
The second pillar aims at enhancing human capital through targeted investments in health and skills development. Key focus sectors include agriculture, information and communication technology (ICT), health, hospitality, and the petroleum industry.
Cross-Cutting Themes to Guide Implementation
The framework will be implemented under six guiding themes:
1. Development of tourism infrastructure and human capital
2. Promotion of digitalization and innovation
3. Climate change mitigation and adaptation
4. Women and youth empowerment
5. Promotion of Islamic finance
6. Strengthening private sector competitiveness
This approach reflects a commitment to inclusive growth that touches all corners of the country’s development matrix.
Financing Structure
The US$800 million funding package is drawn from various institutions within the Islamic Development Bank Group. The IsDB itself will contribute US$500 million. The Islamic Corporation for the Development of the Private Sector (ICD) and the International Islamic Trade Finance Corporation (ITFC) will each provide US$150 million.
Additionally, the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) has allocated US$400 million in insurance and reinsurance support, a move expected to de-risk investments and attract co-financing from other development partners.
Priority Flagship Projects
Several major infrastructure and human development projects have been identified under the framework. Chief among them is the long-delayed Standard Gauge Railway (SGR), which will link Kampala to Malaba at the Kenya-Uganda border and eventually to the port of Mombasa. The SGR is projected to significantly reduce transport costs, improve freight movement, and transform Uganda into a regional logistics hub.
IsDB funding will support preparatory work and construction of key railway segments, reinvigorating efforts to secure additional support and finally break ground on this regional transport initiative.
Other high-impact projects include:
Construction of Regional Oncology Centers in Arua and Mbale
Bukedea Water Works Project
Second Drylands Integrated Development Project in Karamoja (DIDPK-II)
Rehabilitation and equipping of Katakwi General Hospital
Establishment of Lwengo General Hospital
These health and water projects aim to bridge service gaps in underserved regions, thereby improving public health and community well-being.
Infrastructure and Connectivity Investments
Significant funds will be allocated to expanding rural electrification and improving connectivity across Uganda. Notable road upgrades under the framework include:
Nakapiripirit–Amudat Road
Namalu–Lolachat–Nabilatuk–Lokapel Road
Isingiro–Kigarama–Kashumba–Kasheshe–Tanzania Border Road
In addition, the Water Supply and Sanitation Program I is also earmarked for implementation, further promoting access to clean water and improving hygiene in rural communities.
Regional and Global Context
Uganda’s landmark agreement comes as part of broader development financing commitments made at the 360th Meeting of the IsDB Board of Executive Directors. At this session, over US$1.32 billion was approved to support development initiatives across IsDB member countries. These projects focus on inclusive growth, climate adaptation, and livelihood enhancement.
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This year’s IsDB annual meetings were held under the theme “Diversifying Economies, Enriching Lives”—a mantra that echoes Uganda’s own development ambitions. The synergy between Kampala and Jeddah signals a strengthened partnership and shared vision for sustainable transformation.
As Uganda embarks on implementing the CEF, the support from the IsDB Group signals growing international confidence in the country’s development trajectory. It also lays the groundwork for robust partnerships, strategic investments, and a more resilient future for all Ugandans.
