Uganda has signed an agreement with South Korea for a $500 million loan to help finance infrastructure building in the country, Uganda’s Finance Ministry said on Thursday.

South Korea’s Exim Bank will provide the loan, the ministry said in a post on X.

It didn’t provide details on what kind of infrastructure the money would fund but Uganda mostly borrows for road and energy projects.

The new credit will likely add to Uganda’s growing debt problems that prompted Moody’s last month to downgrade its country rating, citing “diminished debt affordability”.

As of December 31, Uganda’s public debt stood at $24.6 billion, fuelled by infrastructure spending.

The agreement was signed by Uganda’s Finance Minister Matia Kasaija and South Korea’s Minister of Foreign Affairs Cho Tae-Yul on the sidelines of the Korea-Africa summit in Seoul.