Uganda and the European Union are seeking to deepen economic ties by mobilising more private investment, expanding trade and combining development funding with financing aimed at accelerating sustainable growth.
The push comes as the two sides mark 50 years of partnership, with cooperation increasingly moving beyond traditional development assistance towards trade, infrastructure, energy, climate finance and private-sector development.
Finance Minister, Henry Musasizi, said Uganda wants the partnership to translate into more investment, jobs and exports as the government seeks to expand productive capacity and attract foreign capital.
“We value the European Union’s longstanding partnership with Uganda and look forward to strengthening cooperation that translates into investment, jobs, exports and sustainable economic growth,” Musasizi said after meeting a delegation led by EU Ambassador to Uganda Jan Sadek on Oct.05.
The EU’s bilateral development cooperation envelope for Uganda for 2021–2027 stands at €539 million (about US$607 million), while Team Europe provides more than €750 million (about US$845 million) a year in development assistance to the country, Sadek said.
The financing is increasingly being structured to draw in private capital through a combination of grants, concessional loans, guarantees and blended finance.
Under the EU’s Global Gateway strategy, Team Europe is investing about €1.4 billion (about US$1.58 billion) in Uganda’s private-sector development, including about €300 million (about US$338 million) in grants for access to finance, skills, improvements to the business environment and productive infrastructure.
The EU is also targeting sectors including coffee, forestry, tourism and critical raw materials, alongside energy, transport and digital connectivity.
“Our portfolio is broad and designed to deliver practical results while supporting Uganda’s own priorities,” Sadek said.
Energy and green finance
Energy is a major part of the partnership, with the rehabilitation of Uganda’s Nalubaale and Kiira hydropower plants among Team Europe’s flagship investments.
The project has a €170 million (about US$192 million) financing package, including €30 million (about US$34 million) in EU grants and concessional loans from the European Investment Bank and the French Development Agency.
The rehabilitation is expected to extend the plants’ operating lives by at least 30 years, helping secure electricity supply for households and businesses while supporting industrial growth.
The discussions also covered climate finance, including Uganda’s preparations to issue its first sovereign green bond.
The EU said it is interested in supporting Uganda’s preparations to access the green bond market and exploring ways the issuance could attract international private capital for environmentally sustainable projects.
Trade takes centre stage
Trade is another area where the relationship has expanded sharply.
Uganda’s exports to the EU rose from €377 million (about US$424 million) in 2015 to €1.8 billion (about US$2.03 billion) in 2025, according to Sadek.
Uganda recorded a trade surplus of about €950 million (about US$1.07 billion) with the EU last year, underscoring the importance of the European market to Ugandan exporters.
The next challenge is to increase the value of those exports by investing in processing, meeting European standards and integrating more Ugandan businesses into European supply chains.
For Kampala, the deepening relationship comes as the government seeks to mobilise capital beyond traditional aid to finance infrastructure, expand businesses and create jobs.
The EU’s financing model offers Uganda access to grants and concessional funding while using guarantees and blended finance to reduce risks for private investors.
That shift could become increasingly important as Uganda seeks to turn its growing export base and investment opportunities in sectors such as energy, agriculture, tourism and minerals into broader economic growth.
