President Yoweri Museveni is expected to lay a foundation stone at the proposed 600 megawatts (MW) Karuma hydro power project on Monday.
President Yoweri Museveni
This, Eng Simon D’Ujanga the state minister for energy, said would signify the kick-starting the construction of the estimated $1.4b project.
“It is an important milestone not only to the project but also to the people of Uganda,” he said.
The ground breaking ceremony follows the award of the contract to build and construct the power station to China’s Sino-Hydropower Corporation.
“Construction work and completion of the project is expected to last 4-5 years,” D’Ujanga said.
“But during the construction phase the local people will get jobs, supply raw materials to the firm and emerging opportunities related to the project.”
The minister said that compensation for the project affected persons has been dealt with “amicably,” calling for “total support for the project.”
Eng Irene Muloni confirmed the development. “The issue of electricity and energy is critical issue for Uganda and everyone should support this project as it will increase power supply for investments and agriculture production,” she said.
The minister said construction is expected to commence next month and will come online by 2018,” she said.
Statistics from the Electricity Regulatory Authority (ERA) indicate that peak demand is growing by 15% every year, and there is need to commission at least 50MW every year if Uganda is to avoid undesirable load-shedding.
Already, electricity demand has increased sharply, following the commissioning of the 250MW Bujagali hydropower project, a signal that policy makers should be bringing new projects online to prevent a reversion to load-shedding.
The increased demand is due to intensified investment in industries that heavily rely on electricity and heightened economic activities.
The National Development Plan (NDP) identifies limited generation capacity and corresponding limited transmission and distribution network as key constraints to the performance of the energy sector.
The NDP further cites increasing power generation capacity as the first objective to address this problem and construction of larger hydropower plants as the first intervention strategy.
The current situation of power demand and power supply option for Uganda, therefore, indicate the proposed Karuma Hydropower Project as a much-needed development as it will add up to 600MW to the national grid.
It will deliver electricity to consumers at an average price of sh300 per unit over five decades. A delay in the project will set the country back.
Facts about the Karuma project
The proposed project was conceived in early 1990s as a potential site to generate 200 megawatts (MW).
In mid-1990s a Norwegian firm, Norpak) acquired exclusive rights to develop the project. However the firm held on-and-off negotiations with government to start work.
But with the prospect of development the 250MW Bujagali hydropower project in late 1990s and early 2000s, the project came to a standstill.
And early 2008, Norpak pulled out after a protracted conflict with the World Bank. It handed the project designs, maps, ground investigations and other information to government.
The government made a decision to increase capacity from 200MW to the current 600MW after feasibility studies confirmed that the water flow could generated that amount of energy. The studies were concluded in 2010.
President Yoweri Museveni ordered that the money in the energy fund ($75m) to kick-start the project. This was the same amount that was used to kick-start the construction of the 250MW Buagali hydropower project.
Museveni also directed that all the oil money close to $800m be channeled to finance the project construction.
The energy ministry in 2010 started the procurement process to identify suitable bidder to construct the project. More than 30 firms showed interest but only five firms were shortlisted. The contracts committee in the energy ministry conducted technical evaluations.
But as the committee was about to release the best technically evaluated firm, a whistle blower petitioned the IGG citing bribery and corruption in the process. The process was halted and re-started afresh.
But again the same whistleblower went to Court which halted the process. The Court ordered for the re-evaluation which the minister of energy and mineral development adhered too.
By Ibrahim Kasita, The New Vision
