President Museveni and His Highness the Aga Khan are this morning expected to formally commission the $860 million (Shs2.1 trillion) Bujagali Hydro Power Project in Jinja.
“Construction has come to completion. The new chapter is exciting for us, we are thrilled...” Mr Bill Groth, the Bujagali Energy Ltd’s resident construction manager, said ahead of the commissioning, which should also be graced by at least 10 regional leaders here to attend the country’s jubilee celebrations.
Bujagali will substantially lower the cost of doing business since its electricity will be sold at a bulk price of $10 cents, which is $19 cents lower than power produced by Electro-maxx and Jacobsen thermal power plants. Electricity is a crucial overhead in industrial production.
Since its completion in June 2012, the government has decommissioned the Aggreko thermal power plants in Jinja and Mutundwe, which were each contributing 50MW to the national grid. This helped the government save the $9.5m (Shs23.3b) which it was spending monthly on electricity subsidies.
From 2005 to 2011, the government had spent Shs1.5 trillion on subsidies, which was not sustainable because it sucked up resources badly needed to fund other large hydropower projects, according to government sources.
At some point, the government had to request BEL, which is comprised of the Industrial Promotion Services (the infrastructure and industrial development arm of the Aga Khan Fund for Economic Development) and Sithe Global Power LLC (USA) to do a “unit-by-unit” commissioning to mitigate the electricity deficit.
BEL will re-use water discharged by the upstream 380 megawatt Kiira-Nalubale power plant.
There were concerns that Bujagali would draw more water from Lake Victoria.
The project was funded by the African Development Bank, ABSA Capital, Agence Francaise de Developpement, Barclays, DEG, European Investment Bank, Netherlands Development Finance Company, PROPARCO, Standard Chartered Bank, the World Bank Group and International Finance Corporation.
With Bujagali now on board, there has been a noticeable end to load-shedding in most parts of the country that are on the national electricity grid. Bujagali is contributing 49 per cent of all the electricity consumed in Uganda. But with the demand for electricity increasing by 10 per cent annually, Uganda will need another power plant to meet the growing demand within the next two years.
The completion of the project frees up 2,000 skilled employees, who will come in handy when the construction of Karuma Hydro Power Project commences next year.