The 250-megawatt Bujagali hydro power project on River Nile near Jinja town has been officially inaugurated by President Museveni in the presence of His Highness the Aga Khan as part of the activities to celebrate 50 years of independence.
According to President Yoweri Museveni, with the completion of Bujagali hydro power that was earlier commissioned, unit by unit, Ugandans will not experience load-shedding anymore. “Uganda’s electricity demand has been growing at an annual rate of approximately 10% in recent years. This has led to demand exceeding supply,something that triggered frequent load-shedding. but now, with the competition of Bujagali, there is a significant increase in power generation and energy and this has virtually eliminated load-shedding. This will spur economic growth and considerably improve the lives of Ugandans.” he said Museveni further said Uganda which now owns the biggest dam on the sub Saharan Africa will put more emphasis on industrialization since it is assured of one of the biggest factor.
Museveni also criticized African past leaders and intellectuals for neglecting the energy sector which he said is a very crucial tool for social transformation and modernization. “One of the mistakes made by Africa’s past leaders and intellectuals was to neglect the energy sector. most African countries would now be modern economies if their past leaders had invested in power generation.” he said Dr Kevin Kariuki, head of infrastructure in Aga Khan’s Industrial Promotion Services, told Red Pepper that, the dam which consumed $860m in total can generate even more electricity than the projected 250 megawatts.
He also hailed the important role played by the government of Uganda especially in ensuring that the project is implemented on time. Contrary to fears from environmentalists and opposition politicians, according to Dr. Kariuki, Bujagali hydro power project has been approved as a Clean Development Mechanism (CDM) by the executive board of United Nations Framework Convention on Climate Change (UNFCCC). He said as a CDM project, it could earn about $17 million per year from selling certified emission reduction (CER) credits to industrialised countries as part of their emission reduction targets under the Kyoto Protocol of the UN framework Convention for climate change.
Under the deal, the Uganda government would receive 60% of the carbon credit income while 40%l goes to BEL. It should be remembered that in May 2007, government extended a shs90m loan to the Bujagali Energy Limited to expedite the construction. Bukenya Matovu, the head of communication in the Energy and Mineral Development ministry, said the dam had doubled Uganda’s electricity supply. He said the power plant currently meets 49% of the country’s energy requirements. BEL is to sell the energy generated to the Uganda Electricity Transmission Company Limited at 10 US cents/kwh and the cost is expected to go down substantially after the expiry of the concession.
Facts About Bujagali
The project came from a public-private partnership (PPP) model between the government of Uganda and a consortium involving the Aga Khan Fund for Economic Development. The consortium formed the Bujagali Energy Limited (BEL) that will own and operate the power plant for a 30-year concession. The plant will then become a government asset. Loans from the World Bank, European Investment Bank, Netherland’s FMO, African Development Bank and France’s PROPARCO, among others, bolstered the project.
Also involved in the project was Industrial Promotion Services (Kenya) Limited and SG Bujagali Holdings Ltd, an affiliate of Sithe Global Power, LLC (USA). The commissioning of Bujagali brings an end one of the country’s most controversial public projects. It should be recalled that in 2000, the story of constructing Bujagali hit headlines after some members of parliament in the sixth Parliament backed with some environmentalists questioned government’s commitment towards protecting the environment.
As they controversially debated and bribery allegations emerged, AES, an American energy company that was to lead the construction, pulled out in 2001 reportedly over financial problems. But in 2006, the project got new contractors in the name of the Aga Khan Fund for Economic Development and consequently these came up with BEL. Aga Khan’s Industrial Promotion Services together with Sithe Global Power embarked on the project hence its commissioning.