Uganda and Libya have signed an agreement on transferring 49 percent stake in the National Housing and Construction Corporation (NHCC) to the Libyan Arab Foreign Investment Company (LAFICO), local press reported in Kampala on Monday.

Ugandan acting Finance Minister Mwesigwa Rukutana and Hamed El Houderi, LAFICO general manager signed the deal on behalf of their respective governments in Kampala at weekend.

Libya has appointed LAFICO as its agent.

The agreement finalized successful negotiations for a debt for equity-swap between the two countries in which Libya agreed to cancel the interest and penalties on Uganda's debt amounting to 88 million dollars of a 184 million dollars debt.

Uganda borrowed from Libya two loans worth 84 million dollars in 1989. the two loans had accumulated to 184 million dollars by May 13, 2005.

Libya canceled almost 89 percent of the accrued interest and penalty interest of 88,695,418 dollars and adopted 95 million dollars as the full and final settlement of the outstanding debt, according to an agreement signed by the two governments earlier this year.

Ugandan transfers 49 percent shareholding in the housing corporation worth 20.3 million dollars as a debt-equity swap. The balance of 74.7 million dollars will be paid in cash over five years from 2005 to 2009.

Source: Xinhua