UPDATE – Construction begins on Uganda’s 250-MW Bujagali

Uganda officials formally marked the beginning of construction August 21 of the 250-MW Bujagali hydroelectric project on the Victoria Nile River.

Prince Karim Aga Khan, leader of 15 million Shia Ismaili Muslims worldwide, agreed to lay the foundation stone for the project. The Aga Khan Fund for Economic Development is helping develop the project, which was defended by the Muslim leader against environmentalist criticism.

“Hydroelectricity is clean energy advancing sustainable development while minimizing its environmental impact,” the Aga Khan said.

Uganda President Yoweri Museveni said developing the US$799 million project would save Uganda the high subsidies it has expended during two years of serious electricity shortages.

“To avert the power shortages, emergency thermal plants have been installed,” Museveni said during the ceremony at Jinja. �You cannot imagine the loss caused by huge subsidies to bring down power tariffs.�

Traditional Busoga healers performed rituals August 19 at the project site in anticipation of the groundbreaking. (HNN 8/21/07) Uganda’s New Vision reported on rituals performed at Bujagali Falls to �relocate� spirits from the falls.

�To prove that they were happy, there was rain as we relocated them,� a leader of the healers, James Christopher Mutyaba, said. �This will allow the construction and completion of the Bujagali hydropower project successfully.�

Following fast-track negotiations that concluded nine agreements, the government of Uganda released US$75 million, financed by Uganda Electricity Transmission Co. Ltd. (UETCL), to Italian contractor Salini Costruttori SpA to assist in mobilization and commence the construction. Initial construction work began June 15. (HNN 7/4/07)

Ongoing activities include construction of a crew campsite, office area, and workshop; site clearing; development of access roads; quarry exploration; and preparation for blasting. Detailed design and procurement of plant, equipment, and machinery is under way, the government said.

The US$799 million project is being developed by Bujagali Energy Ltd., a consortium led by Industrial Promotion Services (Kenya) Ltd., a member of the Aga Khan Development network, and Sithe Global of the United States.

UETCL is responsible for construction of transmission lines and substations to link Bujagali to Uganda’s national grid. Government-owned UETCL has signed a long-term agreement to buy electricity from Bujagali.

The World Bank approved US$360 million in loans and guarantees for Bujagali and a 100-kilometer transmission line. Additionally, the European Investment Bank approved 100 million euros (US$135.4 million) and the African Development Bank approved US$110 million. (HNN 8/13/07)

Scheduled for completion by 2011, Bujagali is expected to reduce the average cost of Uganda’s electricity by 10 percent and bring an end to load shedding.

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