Stanbic Bank, the Ugandan unit of South Africa's Standard Bank Group, is set to provide a $35m loan to independent power producer Electromax to promote its electricity supply.
The funds were offered for the expansion of Electromax's Tororo-based heavy-fuel thermal plant, which will help to solve Uganda's energy crisis.
The plant will utilise the discovered crude oil in the Lake Albert basin, which will have an impact on operations and tariffs.
Daniel Nsibambi, Uganda's Stanbic Bank spokesman, told Reuters that Electromax will use the credit to increase its output to 50MW from 20MW by the first quarter of 2012.
This will increase electricity supply to the national grid and reduce load-shedding.
The project is scheduled for completion in March 2012.
The loan comes shortly after Electromax received a ISO 9001:2008 quality management system certification, positioning it to compete with international power producers.
East Africa's third largest economy suffers from chronic deficiency in power supply, which has worsened after two thermal power plants were shut down because of debts owed to the government.