At the ceremony to lay the foundation stone for the Bujagali Hydropower project, His Highness Prince Karim Aga Khan said that the hydropower scheme will cut the cost of electricity by more than half in the early stages of completion.
The ceremony, which was attended by President Museveni, took place on Tuesday 21 August in Jinja.
"Just imagine for a moment the transformation that can take place when the cost of power is cut by more than half, as it will be in the early stages of this project, and then is later cut in half again," the prince said of the 250MW project, scheduled for completion in 2010.
The project is estimated to cost $772 million, excluding $43 million for any emergencies that may come up and $46 million which is debt service reserve.
President Museveni said he regretted the delay in the construction of the dam, saying it was one of the biggest mistakes he had made in his political career. He, however, went on to promise that the energy crisis would not re-occur, saying "This is sabotage, it is criminal and I assure you that it will not happen again as long as the Movement is in power."
The president went on to blame foreign environmentalists and the international community, "especially in European and American governments" for the 15 year delay in getting the project started.
"We are not going to accept the strategy of chasing demand of electricity; instead we must produce it ahead of demand," he said of the government’s revised energy supply strategy.
The recently established Energy Fund is meant to provide funding for energy projects by harnessing alternative energy sources.
The country’s total power production currently stands at about 230MW while demand is estimated at 350MW. The New York Times reported in July that some "25 of the 44 sub-Saharan nations face crippling electricity shortages, a power crisis that some experts call unprecedented".