Uganda - AfDB Private Sector Provides USD 110 Million to Improve Electricity Production
Tunis, 2 May 2007- The Board of Directors of the African Development Bank (AfDB) on Wednesday in Tunis approved US$ 110 million to finance the Bujagali hydroelectric power project in Uganda.
The project will finance, build and operate a 250-MW run-of-the-river power plant on the White Nile River near Jinja. Associated Bujagali Interconnection Project will link the power plant to the national electricity grid via the construction of about 100 km of 220 kV and 132 kV transmission lines and associated substations.
Uganda consumes energy at slightly more than 5 million tonnes of oil per annum. Of this, over 90% is biomass (wood, charcoal and agricultural residues) as the main source of household energy. Hydropower is generally cheaper, cleaner and more environmentally-friendly than alternatives such as thermal power. Uganda has a comparative advantage in the region with its abundant hydropower potential, although less than 10% has been exploited. The choice of hydropower remains the only viable option to meet Uganda’s escalating electricity needs.
The project has a strong development impact as it will (i) help Uganda to develop its abundant hydrological resources to produce least-cost power for domestic use and export to neighbouring countries in an environmentally sustainable and efficient manner, (ii) promote efficient operations of the power sector through the implementation of comprehensive sector program, increasing the role of the private sector in its operations and future development, and (iii) increase direct access to electricity by rural households. In terms of employment, the project will generate direct employment of 650-1,100 jobs during peak construction and 30 full-time jobs for local staff during operations. In addition the project will bring benefits of induced and indirect employment and trade through the stimulus to the local economy and the greater availability of electricity.