Parliament has approved a government proposal to borrow up to EUR 168.9 million (about Shs700 billion) from the United Kingdom Export Finance (UKEF) and Citi Bank to finance the second phase of Uganda’s Solar Powered Irrigation Systems Project, a major intervention aimed at boosting coffee production and shielding farmers from the growing effects of climate change.
The loan approval paves the way for the construction of 427 solar-powered irrigation systems across the country, targeting coffee-growing areas in 126 districts.
Presenting the proposal to Parliament on Tuesday, Finance Minister Henry Musasizi said the project seeks to enhance rural incomes by increasing agricultural productivity through reliable irrigation.
“The goal of this project is to contribute to increased yields of coffee production through provision of water for irrigation in 126 districts,” Musasizi told lawmakers.
The minister noted that the first phase of the project has been largely successful, achieving more than 99 percent physical completion and delivering 434 irrigation systems nationwide.
According to government figures, the completed systems have improved water access and agricultural productivity for 206,465 households, benefiting an estimated 908,447 Ugandans.
The approval comes at a time when Uganda is grappling with increasingly unpredictable weather patterns, prolonged dry spells, and declining water availability, all of which have affected agricultural output and farmer incomes.
Musasizi argued that expanding irrigation infrastructure has become critical as climate change intensifies.
“The effects of climate change are continuing to escalate and the available water resources for agricultural production are constantly decreasing,” he said. “Farmers are losing a lot of crops due to prolonged dry seasons and this in turn affects their livelihoods.”
Under Phase II, government expects about 2,562 households, representing approximately 11,785 direct beneficiaries, to benefit directly from the new irrigation systems.
The project will also build on existing agricultural support structures by working through the Ministry of Agriculture, Animal Industry and Fisheries (MAAIF) extension network and the ministry’s Coffee Department.
Officials say this will help farmers adopt improved irrigation practices while strengthening agricultural extension services at parish, sub-county, and district levels.
The approval underscores government’s increasing focus on irrigation as a key pillar of agricultural transformation, particularly for the coffee sector, which remains Uganda’s leading export commodity and a major source of foreign exchange earnings.
Uganda has set ambitious targets to increase coffee production and export revenues in the coming years. Officials believe improved irrigation will help farmers maintain production during dry periods, reduce crop losses, and improve resilience against climate-related shocks.
However, the fresh borrowing is also expected to reignite debate over Uganda’s rising public debt burden, with critics likely to question whether the projected economic benefits from the irrigation investment will outweigh the cost of the loan.
For government, however, the message is clear: as climate pressures mount and rainfall becomes less reliable, irrigation is no longer a luxury but a necessity for safeguarding Uganda’s agricultural future.
