Monday, 12 August 2013

Uganda set to be the Hydro power giant in EAC

Proposed Karuma Hydro Dam: the largest in EAC
UGANDA IS SET TO BECOME the hydro power giant in east Africa. It has already awarded contracts to triple its hydro power generation by 2020. The country has in the past three months awarded three contracts for the construction of three hydro dams that will raise her generation capacity by 1400MW.

The projects include the controversial Karuma Hydro-project with a capacity of 600MW, a less controversial, Ayago Hydro dam also with a capacity of 600MW and Isimba dam with a capacity of 188MW. All projects will cost a whopping US$4.2 billion.  On the completion of the projects in seven years’ time, Uganda will emerge as the giant hydro power producer in the east African common Market bloc.  Her current capacity is 700MW which will rise to 2100MW by 2020.

The two projects awarded in the last one month, will be built by Chinese contractors while the US$1.9 billion Ayago Hydroelectric dam will be constructed by a Turkish firm.

 Among these is the controversial Karuma hydroelectric dam which has been on the table since 2009. But it was dogged by controversies with development partners (Read the West) saying that the project was too large for Uganda.

Many called for the project to be scaled down. However the Uganda government, decided to fund the project from internal sources. Even then allegations of corruption in the procurement process delayed the project by another two years until early this year when President Yoweri Museveni took over the procurement process.

Bujagali hydro dam: also faced opposition
 President Museveni has in the past ignored”advice” from “development partners” in the development of Bujjagali Hydro dam which was also dogged by controversy. Since 2005 Uganda   has successfully ignored advice that says scale down a project, opting instead to go it alone.  During the BRICS meeting in March this year, President Museveni carried the project with him to Durban, where he discussed it with the Chinese President Xi Pin.
 Three months later, the contract was awarded to China's Sino hydro Group Ltd. The US $1.65 billion, project will be partly funded by a $500 million Chinese loan. Uganda had already ring-fenced US$600 million for the project. But sources indicate, this amount could be used on budget support as donors have become tight fisted. Reports indicate that work has already began on the Karuma dam.
The ayago project awarded in April is worth US$1.9 billion. It is a 600 MW hydroelectric power plant that will be constructed on the Victoria Nile, downstream of Karuma Power Station, but upstream of Murchison Falls.
The project will be developed in two simultaneous phases, known as Ayago North (estimated capacity:350MW) and Ayago South (estimated capacity:250MW).[ The project was awarded to Turkish  firm, Mapa Construction and Trade Company.
A month later, Isimba hydroelectric project also on the River Nile, was awarded to China International Water & Electric Corporation (CWEC) which hotly contested for the Karuma project with Sino hydro Group
Uganda’s  current power generating capacity stands 700MW while demand is estimated at around 590MW. A huge proportion of this output is consumed by just about three large consumers, including the government, this leaves very little for consumption by the manufacturing sector. Consequently, electricity supply, whose demand grows at 10 per cent a years could stumble economic growth in the country. The government targets a double digit growth in over the decade to 2023. Electricity consumption is expected to exceed 1200MW in 2013.



With the completion of the projects, Uganda will be second only to Ethiopia whose hydro power generation capacity will exceed 6000MW once the Great renaissance dam is completed. This will increase the supply of hydro power in eastern Africa by 8000MW part of which  will be exported to the East Africa neighbours. Already Kenya has signed a contract to import 2000MW from Ethiopia at an estimated annual revenue of US$465 million.

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