Ugandan President Commisions 26 million Dollar Hydropower Project.

Sunday, 1st May, 2011

THE Government will subsidise the connection to the national electricity grid to give more people in rural and semi-urban areas electricity.

This was disclosed by President Yoweri Museveni on Friday while commissioning the 18MW Mpanga hydro-power project in Kamwenge district.

“One of the major constraints to accessing electricity is the inability of the rural and peri-urban dwellers to afford connection costs yet there cannot be the desired transformation unless people have electricity.

“Therefore, my government is looking into starting a subsidy scheme to ease the burden of the high up-front connection costs. This scheme is likely to start in July this year,” Museveni said to thunderous applause from the residents and project officials.

He also urged more Ugandans in the private sector to borrow from a new low-interest facility under the Ministry of Energy to invest more in the energy sector.

“I have noted that there is limited investment by Ugandans in the power sector, including in small hydro projects like this one. I am informed that one of the major constraints is the high cost of local borrowing from our banks,” he said.

“The Government, therefore, instituted a facility, the Uganda Energy Credit Capitalisation Company under the energy and mineral development ministry, to leverage borrowing from local banks so that fair interest rates are charged,” he added.

Museveni urged Ugandan investors to take advantage of the facility and participate in the transformation of the country.

Africa Energy Management Systems Mpanga, a subsidiary of South-Asia Energy Management Systems based in California in the US, owns the $26m (about sh62b) project whose construction started in 2008.

Museveni said this was a sign that their first project indicated good business and confidence in the NRM legal and institutional framework that supports investment.

“This is what our elaborate reforms in the power sector were meant to achieve. We commit ourselves to working with you to ensure that your investments are secure and that they provide benefits to yourselves and the people of Uganda,” he said.

Using the energy fund, the President said the Government was able to construct a transmission line and a sub-station between the plant and the main grid at Kamwenge.

In 2005 when the country experienced acute power shortages, Museveni said short, medium and long-term measures were involved which included thermal power and small dams like Mpanga.

He added that the Government would soon commission more projects like the 6.5 MW Ishasha in Kanungu, the 9MW Buseruka in Hoima, the 3.5MW Nyagak in Nebbi, and the 6.8MW Kinyara-Bagasse project.

“This means by the end of this year, our renewable energy generation from non-Nile sources will be 80MW as compared to less than 20MW four years ago,” he said.

He listed the construction of the 14MW Kikagate in Isingiro, the 25MW Sipi in Kapchorwa and the 14MW Nyamwamba in Kasese due to start early next year, all by private companies, as the projects now in the pipeline.

“The advantage these projects have is that due to their minimal environmental impact, they do not attract much attention from our development partners and from environmental groups who normally create delays by demanding rigorous and unrealistic mitigation measures,” he said.

The Government’s major plan for sustainable supply, however, remains building big projects on the Nile like the soon to be commissioned 50MW of the 250MW Bujagali project, giving a total of 878MW. This, Museveni added, is 14 times the capacity of the then Owen falls dam in place since 1986.

Other dams to be built are Karuma, solely on government funds, which will provide above demand and help export power to Southern Sudan and Eastern Congo.

Others are Isimba and Ayago, which will be commissioned in 2017, and power from oil and gas and nuclear sources.
He listed a national grid extension plan from Kawanda-Masaka, Karuma-Kawanda, Opuyo-Moroto, Tororo-Opuyo-Lira, Mbarara-Nkenda, Nkenda-Mputa-Hoima, Karuma-Lira, Kampala-Entebbe and others under the rural electrification programme.

Government, he said, would soon connect all district headquarters, factories, trading centres, health centres, education institutions and water supply points.

“Once this comprehensive plan has been implemented, there will be adequate infrastructure to form the basis for transformation in areas of production and social services.”

The energy minister, Hillary Onek, praised the project as a milestone in curing Uganda’s energy problems and in line with government priorities to increase generation in several areas.

One of the project managers, Prabda Sumanasekera, said they were glad to be contributing to Uganda’s energy sector, attributing their success to an enabling investment climate in the country.

Another of the directors, Jody Lenam, said they were eyeing building other dams across the country in order to contribute more to Uganda’s infrastructure.

Present at the function were energy ministers Hillary Onek and Simon D’ujanga, permanent secretary Kabagambe Kalisa, Electricity Regulatory Authority boss Frank Ssebbowa, UMEME boss Charles Chapman, area MPs and other district leaders.


By Cyprian Musoke and Hope Mafaranga: The New Vision Newspaper