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President Yoweri Museveni has approved a financial injection into the local automotive industry, committing to secure an additional $143 million (approximately Shs 500 billion) for the Kiira Vehicle Plant.
The government of Uganda has so far invested $ 120 million or about Shs 418billion.
The President made the announcement while commissioning the facility in Jinja.
The plant is located in the Jinja Industrial and Business Park, in Kagogwa Village, Mawoito Parish, Kakira Town Council, Jinja District. It occupies about 100 acres of land.
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This new funding is expected to dramatically increase the plant’s production capacity.
Responding to queries about the need for extra funding in order to scale up the plant’s capacity, Museveni said, they would not be a problem to the government.
“Regarding the future I don't see any problem, that $143 million, we shall get it for sure,” President Museveni stated.
He explained that this capital is crucial for completing the plant’s development and expansion, a move which the Chief Executive Officer of Kiira Motors, Paul Musasizi, confirmed would enable the facility to produce 10,000 vehicles annually, a four-fold increase from the current capacity of just 2,500 units.
President Yoweri Museveni at Kiira Motors
Focus Shifts to Local Lithium Battery Production
President Museveni however, guided that immediate focus must be on tackling the high cost of components, particularly batteries for electric vehicles.
He noted that lithium batteries constitute approximately 60% of the total vehicle cost, a challenge that must be overcome to make the products competitive and affordable.
“But we need to start on the Lithium batteries because Musasizi has told me that these batteries take about 60% of the cost. In order to resolve this problem of the cost we need to start producing lithium batteries,” Museveni asserted.
He expressed confidence that this project could attract foreign investment, potentially easing the financial burden on the government.
“I am talking with a number of investors and they are coming in big numbers, we might not even have to use government funding, they will come with their own money.”
The Shs 500 Billion commitment builds upon the initial investment in the project, with Kiira Motors CEO Paul Musasizi noting that the government has already invested $120 million in the company since 2018, which has successfully funded the construction of the plant.
Kiira Motors buses
Prioritising Government Procurement
Musasizi expressed strong confidence in the plant’s future, stating that the project has stepped into a pivotal phase focused on building a sustainable business.
He stressed that a key element of the business strategy involves government support through procurement. “We are now at a pivotal point where we are discussing the fourth aspect of building business and we are confident about this, that the government will prioritise buying vehicles from here in order for us to have a compelling case as we move to export these vehicles to the regional markets,” Musasizi stated,