The governments of Uganda and China have signed a memorandum of understanding to construct a 188 Megawatts hydro-power dam at Isimba Falls in Kayunga District-40kms downstream from newly built Bujagali Hydropower Dam.
The July 22 dated memorandum awarded China International Water and Electric Corporation (CWE) a $500 million (about Shs1.3 trillion) project funded by the Chinese’s Export and Import Bank (Ex-Im) in a bilateral arrangement between the government of Uganda and China.
“The president of Uganda and his counterpart Xi Jinping (Chinese) signed a bilateral arrangement in Durban, South Africa to construct Isimba Hydropower project on concessional terms,” Mr Liu Renwei, the CWE deputy general manager said during the commissioning of the project on Friday.
The project, which is expected to commence in September and is expected to be ready in 34 months, will have an average of 6.8KWH electricity tariffs, the lowest in the region.
Currently, power generation in Uganda costs $7.1 (about Shs18,000) while in Kenya $9.4, in Burundi $8.5 and Rwanda $20. Mr Liu says CWE will also construct a transmission line from Isimba to Bujagali. According to CWE officials, more than 1,500 permanent and 3,800 casual jobs opportunities will be created during the 34-month period.
Mr Henry Bidasala, the assistant commissioner in-charge of Electrical Power in the Ministry Of Energy and Mineral Development, said more than 350 households will be relocated in a period of three months after the government has compensated them.
“They will be compensated after assessments of the land, people and their property likely to be affected. This will be done by a government valuer,” Mr Bidasala said.