African bank begins compliance review of Uganda’s 250-MW Bujagali

The African Development Bank (AfDB) has initiated a compliance review of the 250-MW Bujagali hydroelectric project and a related transmission project, under construction on the Victoria Nile River in Uganda.

Meeting in Tunis, the AfDB board authorized the review under rules of its Independent Review Mechanism, which was established by the bank to manage complaints submitted by those alleging they are likely to be affected adversely by a bank-funded project.

The action was in response to a review request filed May 16 by the Ugandan National Association of Professional Environmentalists and other local organizations. The groups claimed a number of bank policies and procedures had not been complied with during preparation of the Bujagali project, in relation to economic and financial analysis, environmental assessments, indigenous people, cultural heritage, and resettlement.

AfDB approved US$110 million in financing for Bujagali and the associated 100-kilometer transmission interconnection project. The African bank joined the European Investment Bank, which provided 100 million euros (US$135.4 million), and the World Bank, which approved US$360 million in loans and guarantees.

Uganda officials formally marked the beginning of construction of Bujagali in August. (HNN 8/22/07) 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.

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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