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Friday, 12 October 2012

Uganda's Bujagali Hydropower Plant Station goes on stream

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.