The grant was signed on Tuesday in Kampala by State minister for Finance David Bahati, and director for East Africa KfW Development Bank Klaus Mueller during the visit of German Chancellor's personal representative for Africa Gunter Nooke in Uganda.

Speaking to Daily Monitor yesterday in Kampala, Dr Mueller said this is the second contract they have signed to increase connectivity of electricity to Uganda.

"This grant will go towards increasing connectivity of communities in Uganda. In the past, we focused on generation but we realised there was need to increase access of communities to electricity," he said.

According to a statement released by the German embassy in Kampala, the new grant will finance a programme to electrify rural communities of the country.

"The new grant will finance a programme to electrify communities located along existing power lines in rural and peri urban areas of the country."Specifically, the programme promotes investments in medium and low-voltage electricity lines, transformers and household connections," the statement reads in part.

The funding includes capacity building at Uganda's Electricity Regulatory Authority to improve the regulatory framework for grid interconnection of small renewable energy projects in Uganda The programme will benefit private households, small-scale companies and public institutions such as schools and hospitals. The funding will be made available to the Rural Electrification Agency which is responsible for the implementation of the programme.

Other projects

Besides programmes for access to electricity, KfW also implements projects for the generation of electricity such as the GET FiT Uganda Programme which supports small renewable energy projects. Government of Uganda signed a £14.7 million grant agreement with KFW to finance the Grid Interconnection Support component for the GET FiT Programme.