September 25, 2013 / 6:14 PM / 4 years ago

Uganda gets $150 mln from EU for roads to boost regional trade

* EU has often funded Ugandan infrastructure

* Uganda budget strained after some Western nations cut aid

By Elias Biryabarema

KAMPALA, Sep 25 (Reuters) - The European Union has given Uganda 112 million Euros ($151 million) in credit and grants to help pay for roads meant to help boost trade in east Africa, it said on Wednesday.

The EU has traditionally been a major source of financing for transport infrastructure for the prospective crude oil producer.

Uganda, however, has lately appeared to lean increasingly toward China which has extended cheap loans to help finance projects including highways, hydro power dams and public office blocks.

Uganda’s national budget has been squeezed since major western donors including Britain, its biggest source of bilateral aid, suspended financial support toward the end of last year after allegations that $13 million worth of aid had been embezzled. The EU however has continued its funding.

The latest funds will help to improve the Kampala Northern Bypass and construct the Mbarara Bypass, which would speed up the flow of cargo on a highway linking Uganda, Rwanda, Burundi, the Democratic Republic of Congo and South Sudan to Kenya’s Mombasa seaport.

$1 = 0.7403 euros Editing by James Macharia; Editing by Ruth Pitchford

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