AfDB, Uganda Sign Bujagali Power Interconnection Project Loan Agreement

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Tunis, 29 October 2007 -  Efforts to accelerate the implementation of the Bujagali Power Interconnection Project (BIP) in Uganda received a boost last week with the signing of a 19.21-million Units of Account (UA*), about US$ 29.7 million agreement by officials of the African Development Bank Group and the Government of Uganda.

The agreement was signed on Friday in Tunis by the Ugandan Ambassador to Libya, Moses Kiwe Sebunya and the Director of the African Water Facility, Kordje Bedoumra on behalf of the Vice President in charge of Infrastructure, Private Sector and Regional Integration, Mandla Gantsho; in the presence of the Executive Director for Uganda in the Bank, Peter Sinon.

"The common goal of the Government of Uganda and the African Development Bank for the electricity sector is to improve the population’s access to electricity for the country’s social and economic development in an environmentally sustainable manner," he said. The project, he added, would provide adequate transmission capacity to provide electricity to consumers from the Bujagali power station near Jinja, some 87 kilometres north-east of Kampala.

The project, which involves construction of 100 km of power transmission lines, was approved in June by the Board of Directors of the African Development Fund and complements a public-private partnership to build a 250-MW hydro electric plant for which the Bank had approved a loan of US110 million a month earlier making the Bujagali one of Africa’s largest hydropower projects.  The total cost of the project is estimated at US$ 735.5 million, of which the AfDB’s contribution amounts to US$ 139 million for the dam and the transmission lines.

During a tour of the project site early this month, AfDB President Donald Kaberuka said that the Bank Group was strongly committed to assisting member countries in their efforts to further develop their energy potential "This is the time for Africa to harness its huge hydro-energy potential," he said.

The main project beneficiaries include Power distribution utilities and households. Industrial and commercial electricity consumers connected to the national grid will benefit from improved reliability and lower cost of supply as a result of the project. These will include all existing as well as potential electricity clients of the distribution company, UMEME, which currently has about 300,000 customers, including an estimated 250,000 households that are connected to the grid and growing at about 20,000 every year. In addition, the project will deliver the energy required to supply some 280,000 new customers that are expected to be connected to the 5interconnected with Uganda could also benefit from the improved supply and export potential of the system.

The total cost of the BIP is estimated at UA 50.13 million, equivalent to US$ 75.84 million.  The project is being financed by the ADF, the Japan Bank for International Cooperation (JBIC) and the Uganda Electricity Transmission Company Limited (UETCL) in proportions of 38.3%, 38.3% and 23.4% respectively.

The Bank Group commenced operations in Uganda in 1968 and has to date approved 102 operation for the country comprising projects in Agriculture (27%), Social Sector (19%), Multi-Sector (14% Water, (8%), financial Sector (8%), power (6%), industry and mining (3%) and communications (1%). The Bujagali Interconnection Project loan brings the Bank Group’s total cumulative commitment in the country to UA 911 million of which UA 309 million has been disbursed.

* 1 UA = 1.55665 US$ = 2544.12 UGX as at 29/10/2007

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