Cut-throat competition among foreign lenders to finance trade and projects in Uganda has compelled regional development lender, PTA Bank, to forge closer relationships with local business associations to protect its market share.
After years of remote presence in Uganda that has seen the lender execute local transactions from Nairobi, PTA Bank has entered into an alliance with the Uganda National Chamber of Commerce and Industry (Uncci).
Some Uncci members have expressed interest in construction and manufacturing projects, a vital entry point for PTA’s financial deal.
A significant financing gap for numerous infrastructure projects in the power, transport and education sectors has stimulated interest among large foreign players eager to invest excess capital in big projects that yield high returns.
While PTA bank has financed export and import based businesses within the Common Market for Eastern and Southern Africa (Comesa) bloc, it has also raised its ambitions towards project financing through a proposed infrastructure fund valued at $1 billion that will finance new projects in transport, energy and manufacturing sectors across Comesa region, with initial funding of $200 million.
“We expect to raise $10 million from Comesa member states, while PTA Bank will contribute $20 million to the new infrastructure fund. Using our local networks in the chambers of commerce, we intend to dig deeper for new infrastructure deals across the region. The growth of public private partnerships also offers many entry opportunities for the Bank’s expansion agenda,” said Admassu Tadesse, PTA Bank’s president and chief executive officer.
Previous beneficiaries of PTA Bank’s credit facilities include Hydromax Ltd, Kinyara Sugar Works Ltd, Luuka Plastics Ltd and Civil Aviation Authority, which secured $11 million in project finance.
Other project finance deals executed by PTA Bank include an $11 million facility extended to Kenya Ports Authority and $29 million allocated to Tanzania Airports Authority.
Local analysts believe PTA Bank’s regional mandate has somewhat hindered its penetration in Uganda over the years, a situation unlikely to change in the near future.
“The Bank provides relatively short turnaround times for approving project and trade finance transactions compared with some of its peers. However, its Comesa ownership status has limited its performance in Uganda due to apparent concerns over balancing investments across member states,” noted Paul Bwiso, general manager of Dyer and Blair Uganda Ltd, a stockbrokerage firm.