Uganda, African bank sign funding for 250-MW Bujagali’s grid system

Officials of the African Development Bank (AfDB) and the Uganda government signed a loan agreement October 26 providing US$29.7 million for construction of transmission lines and substations to link the 250-MW Bujagali Falls hydroelectric project to Uganda’s national grid.

The project to construct 100 kilometers of transmission lines was approved in June by the AfDB, complementing the public-private venture to build the Bujagali hydro project, for which AfDB, one of several backers, has provided US110 million. (HNN 10/10/07)

The total cost of the Bujagali Interconnection Project is estimated at US$75.84 million, of which AfDB and the Japan Bank for International Cooperation are providing 38.3 percent each, while Uganda Electricity Transmission Co. Ltd. (UETCL) is providing 23.4 percent.

UETCL, which called for construction bids in August, has appointed Bujagali Energy Ltd. (BEL), the hydro project’s development consortium, to handle development and management of the Bujagali Interconnection Project. (HNN 6/4/07) BEL, in turn, named PB Power of the United Kingdom to act as owner engineer and to assist with issuing and receiving tender documents.

AfDB said main beneficiaries of the interconnection project would be distribution utilities and consumers. Additionally, industrial and commercial electricity customers will benefit from improved reliability and lower cost of supply as a result of the project, the bank said.

Government-owned UETCL has signed a long-term agreement to buy electricity from Bujagali. The US$400 million hydro project is being developed on the Victoria Nile River by BEL, a consortium led by Industrial Promotion Services (Kenya) Ltd., a member of the Aga Khan Development network, and Sithe Global of the United States.

Uganda officials formally marked the beginning of construction of Bujagali in August on the Victoria Nile River. 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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