Nov. 10 (Bloomberg) -- China plans build and manage a toll road from Uganda’s Entebbe International Airport to the capital, Kampala, to reduce congestion, Uganda’s presidency said.

The Chinese government will build the road using concessionary loans from the Export-Import Bank of China, the presidency said in a statement late yesterday. It didn’t provide further details. The existing 36-kilometer (22-mile) Kampala- Entebbe road experiences regular traffic jams because of congestion.

China is one of the main sources of foreign direct investment for the East African country, which has discovered commercially viable oil deposits, according to the Uganda Investment Authority. The state-owned China National Offshore Oil Corp. has expressed an interest in joining Tullow Oil Plc’s development of discoveries in Uganda.

In addition to the toll road, China wants to pursue investments in the infrastructure and oil-refining industries in the East African country, according to the statement.

Ugandan President Yoweri Museveni has also asked the Chinese government to provide soft loans for the planned 500- megawatt Karuma hydropower dam along the Nile River, about 300 kilometers northwest of Kampala.

Uganda is seeking investors for a public-private development of the project following the collapse last year of talks with Norway’s Norpak Power Ltd., according Uganda’s Energy Ministry. The project may cost as much as $1 billion, it said. No discussions have been held with interested investors, Brian Glover, Tullow’s country manager for Uganda, said on Oct. 2.

To contact the reporter on this story: Fred Ojambo in Kampala via Johannesburg at pmrichardson@bloomberg.net.

Last Updated: November 10, 2009 01:27 EST