Government backs major water investment as utility warns rising demand is putting pressure on existing networks
KAMPALA — The National Water and Sewerage Corporation (NWSC) is seeking Shs650 billion to expand water production and distribution systems in 50 towns across Uganda, in a major investment plan aimed at easing pressure on existing networks and improving access to reliable water.
The proposed financing, estimated at about $176 million, will see Government provide Shs500 billion as a concessional loan at an annual interest rate of two per cent, while another Shs150 billion will be provided as a revenue grant.
According to the proposal, the loan will come with a two-year grace period and will be repaid over 20 years, with NWSC expected to service the loan from its own revenues.
The funds are expected to be released in five annual tranches of Shs130 billion between the 2027/28 and 2031/32 financial years.
The proposed investment comes at a time when NWSC says its water networks are operating at an average 85 per cent capacity utilisation, a level at which customers increasingly begin to experience water shortages.
50 towns targeted
The project, known as the 50 Towns Water Supply Improvement Project, will cover towns across all four NWSC regions.
The Central region will receive Shs202 billion for 14 towns, while another Shs178 billion will go to 14 towns in the Eastern region.
Eight towns in the Northern region are earmarked for Shs90 billion, while 14 towns in the Western and South-Western regions will share Shs180 billion.
Individual allocations will range from Shs10 billion for smaller towns to Shs30 billion for larger systems, including Gomba and Tororo.
The planned works will focus on expanding water production systems, installing electro-mechanical equipment, extending transmission mains, constructing storage reservoirs and strengthening distribution networks.
NWSC also plans to improve water-quality monitoring as part of the investment.
Otafiire pledges Government support
The proposal received backing from the Minister of Water and Environment, Gen. Kahinda Otafiire, during his maiden visit to NWSC’s International Resource Centre in Bugolobi.
Otafiire urged the corporation to think beyond immediate challenges and develop long-term plans capable of serving Uganda’s growing population.
He also pledged Government support for efforts to establish local assembly plants for water-sector equipment such as pipes and meters, arguing that global conflicts and supply-chain disruptions have demonstrated the need for greater domestic production.
The minister further urged NWSC management to retain and motivate employees with specialised skills, saying strong institutions require both capable personnel and effective management.
NWSC’s rapid expansion
NWSC Managing Director Dr Silver Mugisha told the meeting that the corporation’s expansion has significantly increased the demand for investment.
The utility has grown from serving 23 towns in 2013 to 293 towns as of June 30, 2026, while the number of people served has risen to more than 22 million.
During the same period, NWSC connections increased from about 300,000 to more than one million, while annual turnover rose from Shs120 billion to Shs680 billion.
The corporation’s asset base has also grown from about Shs580 billion to Shs5 trillion.
Despite this growth, Dr Mugisha said NWSC currently faces an overall investment financing gap of about Shs1.436 trillion, making additional financing critical for expanding infrastructure.
Focus on efficiency and local capacity
NWSC says it intends to implement the proposed projects using its own design and engineering supervision capacity.
The works will be packaged into regional and technical lots to create opportunities for domestic and regional contractors, while critical equipment will be procured directly from manufacturers.
The corporation also plans to establish stronger financial and procurement controls, including a dedicated project ledger, annual investment plans, internal audits and quarterly public reporting.
NWSC says it will also continue efforts to control non-revenue water, ensuring that more of the water produced reaches paying consumers.
Push for solar power and local manufacturing
Beyond the Shs650 billion financing request, Dr Mugisha asked Government to support the corporation’s plans to solarise its power systems as a way of reducing the high cost of electricity used in water production and pumping.
He also called for support to establish local production of some of the materials currently imported by NWSC, including soda ash, polymers, water meters and generators.
The push for local manufacturing is expected to reduce dependence on imported equipment while helping Uganda build domestic capacity in the water sector.
NWSC Board Chairman Prof. Henry Alinaitwe pledged continued strategic guidance and oversight as the corporation pursues the proposed investment.
If approved, the 50-town project would represent one of NWSC’s major coordinated infrastructure investments aimed at increasing production capacity, strengthening distribution systems and keeping pace with Uganda’s rapidly growing demand for safe and reliable water.
END
