| THE INDEPENDENT | Investors in the tourism sector have an opportunity to exploit out of the Uganda Development Bank and European Union partnership involving a Shs62bn facility, executives said on May 18.
Representatives from the two partnering agencies openeda the call for entries for eligible businesses in the tourism sector to receive up to Shs1bn in grants and soft loan with flexible terms aligned to the current needs of the sector.
The facility is intended to give operators access to working capital to fast track recovery post the Covid-19 devastating effects and support initiatives to become more environment friendly.
Patricia Ojangole, the managing director of UDB said, “At the onset of the Covid-19 pandemic, Uganda like other countries, sanctioned travel restrictions within and out of the country. The travel restrictions and standard operating procedures contributed to a severe contraction of business opportunities and viability of businesses resulting in closure for some and eventual loss of jobs. This facility is targeting the recovery of these businesses as they take advantage of growing tourist traffic both local and foreign.”
The Shs62bn facility is made up of Shs40bn ring-fenced funds from UDB and complemented by a grant of Shs21.8bn from the European Union. Under this facility, only customers that qualify for the loan will be eligible for the grant.
The flexible facility offers a low interest of between 8% -12% repayable within a five-year period with a two-year grace period. UDB will also provide business advisory services under the Business Accelerator for Successful Entrepreneurship to assist intending applicants meet the criteria for the application.
A complementary environmental assessment by a certified organization will also be offered to successful applicants to facilitate the improvement of their environmental footprint through among others better waste management and renewable energy sources.
“The call is open to legally registered businesses that have been in operation for at least two years. Additionally, applicants must demonstrate that their businesses will be able to retain their employees during the period of the loan,” Ojangole added.
Going forward, she said, the development bank remains committed to agile innovations to match the needs of customers and to support the mission of the Bank in improving the quality of lives of Ugandans through high impact interventions.
This programme was designed in 2020 in partnership with key stakeholders in the sector to respond to the COVID-19 pandemic hit on businesses.
Caroline Adriaensen, the EU head of cooperation said, “For this second call, a lenient criterion has been adapted to better meet the needs of the sector today, like incorporating the list of eligible expenditures the companies initiated to make tourism establishments more environmentally friendly.
Adriaensen said, this could include investments aiming at improving waste management, promoting the use of alternative sources of energy, and going digital among others.
“The EU is committed to supporting the tourism sector in Uganda to ensure many more people from all over the world come and visit this beautiful and amazing country,” she said.
Martin Mugara, the state minister of tourism urged the players to create more awareness about the programme so that more beneficiaries come onboard and impact the economy in general. Mugara said, this facility comes at the right time when the country is registering a growing middle class, which is key in supporting growth of domestic tourism and the sector in general. The deadline for all applications is October 31, 2022.
Key facts
- Qualifying businesses to receive up to Shs1bn and a minimum of Shs100m
- Fund to fast track post-Covid 19 recovery and greening activities in the tourism sector
- A total of Shs61.8bn (Shs40bn in UDB loan plus Shs21.8bn in EU grant) earmarked
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