The African Development Fund ( ADF ), the concessional lending arm of the African Development Bank Group, has approved loans and grants to Uganda and South Sudan for an electricity interconnection project between the two East African neighbours.

The project will cost US$260 million, of which US$153.66 million will be provided by the ADF.

The fund will provide a loan of US$119.21 million to Uganda and a grant of US$32.50 million to South Sudan. The Nile Basin Initiative, of which both countries are members, will receive a further US$1.95 million grant.

The European Union is providing a grant of €48.93 million ( US$51.25 million ) to South Sudan while the Ugandan government has committed matching funding equivalent to US$17.44 million.

The project aims to integrate South Sudan into the East African Power Pool network to address electricity shortages, as well as issues related to reliability and affordability of supply, in the country. It will also provide surplus generating capacity in Uganda, while expanding electricity trading between the two countries.

The project includes the construction of a 299-kilometre electricity interconnection between Gumbo village, near Juba ( capital of South Sudan ), and Olwiyo in Uganda ( 149 kilometres in South Sudan and 150 kilometres in Uganda ); construction of two new 400/132/33-kilovolt substations, one in Gumbo and the other in Biba on the border with Uganda; and the expansion and upgrading of the Karuma and Olwiyo substations.

Other components include the installation of distribution networks and 1,000 last-mile connections; project administration and management; capacity building and joint coordination, including a study on the cost of electricity services for South Sudan; and, finally, a resettlement action plan, including the restoration of livelihoods and an action plan for gender equality.

Uganda and South Sudan signed a memorandum in 2015 on the creation of a 400kV transmission line between Olwiyo and Juba to address electricity deficits in South Sudan. The aim was to provide clean, reliable and affordable electricity supply to South Sudan while increasing electricity export revenues for Uganda.

The new interconnection will enable the exchange of 624 gigawatt-hours of energy between the two countries each year on average, reducing greenhouse gas emissions and improving access to electricity for 286,710 people in South Sudan.