Uganda to borrow $118 mln from China to build roads key to oil production

KAMPALA, Feb 11 (Reuters) - Uganda said on Tuesday it would borrow up to 108.5 million euros ($118.42 million) from a Chinese lender to fund construction of three roads that are key to plans to begin oil production in the east African country.

Along with others in Africa, Uganda has received large credit lines from China in recent years as part of the Asian giant’s so-called Belt and Road Initiative, aimed at rebuilding the old Silk Road connection with Asia, Europe and beyond.

However U.S. officials have been critical of Belt and Road lending, which they say can leave countries with excessive debt.

Construction of the so-called oil roads would accelerate efforts to commence crude oil production in Uganda, which has failed to take off 14 years after crude reserves were discovered in the country’s west.

The money will be borrowed from China’s Industrial and Commercial Bank of China, according to a statement issued by the government that listed decisions taken at a cabinet meeting on Monday.

The statement said the roads are needed to “facilitate the efficient development and production of the strategic national oil resources”. It did not give details on the total length of roads to be built.

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