On the 9th of October
the 250 megawatts (MW) Bujagali Hydropower plant was commissioned by the Ugandan
President Yoweri Museveni and His Highness the Aga Khan. This plant doubles
Uganda’s power generation to approximately 509 MW.
This hydroelectric
power station is located across at the Victoria Nile, and harnesses the energy
of the Bujagali Falls in Jinja, Uganda. Construction of the power station began
in 2007 and concluded in June 2012.
The
project was initially mired in controversy before construction work began when multi-lateral
donors withdrew from the project, delaying its implementation for years, citing
corruption and other unethical practices. This delay led to Uganda relying on
expensive 100MW thermal power plants powered by Aggreko that were needed to
bridge the gap of 170 MW power deficit that resulted in regular power black
outs and load shedding of up to 12 hours per day. With this station coming on
stream this situation should a distant memory for the Ugandan people.
Power
demand in Uganda are grown at 10% per annum on the back of an average GDP
growth of 6% p.a and a population growth rate of over 3% p.a. over the last 7
years. Power supply has lagged behind leading to the unfortunate consequences
listed above.
The
project is funding by Ugandan government to the tune of US$ 20million in the
form of land. Bujagali Energy Ltd is a US$200m company that owns the project
with equity partners who include Industrial Promotions Services (IPS) –A listed
Aga Khan Fund for economic development company, Jubilee Insurance (another listed Aga Khan Fund company) and Blackstone Capital/Sithe Global Power consortium. A credit line of
US$700m was procured from a consortium of lenders who include The International
Finance Corporation (IFC), African Development
Bank (AfDB) , KfW of Germany and Barclays bank. This is an example of
where Public Private Partnerships (PPP) can be used to construct much needed infrastructure
in Africa where governments are not able to foot the cost of projects on their
own.
The commissioning
of the plant is also set to save the Ugandan government US$ 9.5million per
month in subsidies required to
keep electricity tariffs at an affordable rate.
Ugandans
should now be able to enjoy uninterrupted power supply throughout the day
barring any other issues. It will also save businesses that have had to resort
to generators to power their electrical needs at an added cost operational cost.
For
more information on this project see website below.
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