Cape Town, South Africa — ESI-AFRICA.COM — 17 March 2011 – Uganda has raised the cost estimate for the 650MW Karuma hydro-electric dam it is planning to build on the Nile River later this year.
Revealing this in an interview here, Uganda Electricity Generation Company managing director John Eric Mugyenzi said the results of a feasibility study showed that the project would cost about US$2.2 billion to complete. The plant had initially been projected to cost around US$1.3 billion, according to a statement by President Yoweri Museveni in February last year. The dam was expected to start producing electricity in the next five years, he added.
“The government has prequalified a list of interested contractors, Mugyenzi continued. “Uganda is talking to the African Development Bank to finance the project and is also considering floating a government bond to pay for the project.”
Uganda’s first large hydro-electric project, the 250MW Bujagali dam, is expected to start producing 50MW in October, with full production anticipated in April 2012. Mugyenzi revealed that the facility would double the country’s hydropower capacity when complete. Uganda currently faced a power deficit of between 120 and 160MW.
“The unpopularity of hydro in the nineties because of environmental concerns meant that initially there was a stigma against financing Bujagali,” Mugyenzi explained. “Now that hydro is seen as green energy, we see fewer challenges to developing Karuma.”