World Bank tells Uganda to build one dam at a time

The World Bank advised Uganda April 4 to build the cheapest of two proposed hydropower plants on the Nile first, the 250-MW Bujagali Falls project, instead of rushing to meet a growing power deficit by building two dams at once.

The east African country is suffering a severe electricity shortage that causes daily blackouts. President Yoweri Museveni has blamed the shortfall on “meddling” foreign donors whom he says rejected plans to build two dams at the same time.

The World Bank said Uganda should consider starting with Bujagali Falls before tackling another dam farther downstream, 200-MW Karuma.

“Based on the preliminary assessment thus far, we believe the proposed Bujagali project is the least-cost option,” World Bank country representative Grace Yabrudy said. “The bank has confirmed its support … subject to completion of the ongoing analysis and approval by our board.”

Aga Khan unit, Sithe revived Bujagali

Government-owned Uganda Electricity Transmission Co. signed a long-term agreement in December to buy electricity from Bujagali, which is to be built on the Victoria Nile River. The US$400 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.

Yabrudy said the scale of the bank’s financial involvement had yet to be decided. She rejected an April 3 report by state media that the bank also backed the plans for Karuma.

The Bujagali project has repeatedly foundered amid bribery accusations and opposition from an environmental group. Bujagali Energy Ltd. reactivated the project, which had been stalled since 2003 with the withdrawal of its previous developer, AES Corp. of the United States.

Development of Karuma was put on hold when initial decisions were made to proceed with Bujagali Falls. However, during Bujagali’s problems in 2002, Uganda officials and Norpak Power Ltd. of Norway were quoted saying Norpak was ready to proceed with Karuma as soon as the government gives approval.

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