Construction of Ugandas much- needed Bujagali Hydropower Plant has finally kicked off in a bid to address the deepening power crisis that is threatening the East African countrys economic growth.
The construction of the 750 million US dollar project was launched on Tuesday by the Aga Khan and Ugandan President Yoweri Museveni at the site located 8 km downstream from the Nalubaale and Kiira power plants on the Nile River in Jinja, eastern Uganda.
Following the increasing demand for power Uganda has embarked on a strategy to ensure energy supply security. The 250 MW power project is considered an integral component of the country’ strategy to close an energy supply gap that constrains social and economic development.
Statistics by the Ministry of Finance and Economic Planning showed that this power crisis has contributed to the decline of the countrys Gross Domestic Product to about 5 percent from 6,5 percent in the financial year 2006-07 that ended in June.
Kevin Karuiki, who is in charge of overseeing the construction of the dam, said recently that the project would start two months earlier than the planned time because of the urgent need to address the need for power.
The project is being financed by the Ugandan government, the World Bank and a consortium led by Industrial Promotions Services Ltd, which is based in Nairobi, Kenya. The Aga Khan, spiritual leader of about 20 million Ismaili Muslims, is the majority shareholder of the Industrial Promotions Services Ltd.
Uganda, like many of its sub-Saharan counterparts, relies on hydroelectric power from Lake Victoria, the vast lake shared by Uganda, Kenya and Tanzania.
Since 2000, Uganda has sapped all the electricity its dams can produce. Falling water levels on Lake Victoria mean the dams are already running below capacity, exacerbating (forværrer) the power shortages.
The Daily Monitor reports that an initial 50MW of electricity from the dam will be generated after 36 months from September 2007 when construction begins in earnest.
Electricity prices will start dropping once that 50MW comes on stream. The prices will continue to reduce as the subsequent 200MW is released onto the national grid monthly in four phases.
The reduction in power tariffs would shrink the cost of manufacturing, encourage investment, employment, enhance development, and improve Ugandas overall economic growth. …
Kariuki said Uganda is currently charged between 25-31 US cents for a unit (kilowatt-hour) of power. – During the debt repayment period, tariffs will reach about 11 US cents per unit and over 30 years of approximately 6-6,5 US cents per kilowatt-hour, Kariuki noted.
The Aga Khan said that the current skyrocketing costs have worked to reinforce the cycle of poverty for millions, and badly impaired the ability of Ugandan companies to compete in international markets thereby curtailing the expansion of employment.
Kilde: www.worldbank.org
