World Bank to approve Bujagali funding in May

The World Bank is expected to approve in May the 750 million U.S. dollars funding for the Bujagali hydropower dam project in Uganda.

According to state-owned New Vision on Saturday, World Bank, the leading lenders and the project developers, will meet late this month and in early April to finalize the project's financial transactions, paving way for the actual commencement of the construction.

The World Bank through its private sector lending arm, the International Finance Corporation, the African Development Bank, the European Investment Bank, are the leading financiers of the project.

The Bujagali Energy Ltd, a joint venture between Kenya's Industrial Promotion Services and the United States-based power firm, Sithe Global, won the tender to develop the plant.

Negotiations on the engineering and procurement contract are in the advanced stages, raising financiers' confidence.

The resettlement action plan and the environmental impact assessments have already been submitted to National Environmental Management Authority, to solve environmentalists' concerns of the project's impact on the environment and tourism.

The environmentalists have claimed that the project developers have not established cumulative impacts of Nalubaale, Kiira and Bujagali power stations on the River Nile and Lake Victoria.

They also claim that since the cost of the Bujagali construction has risen to 750 million dollars from 500 million dollars, ordinary Ugandans will not afford the electricity the project will produce.

However, an assessment in the region said that cumulative impacts on the environment from multiple hydro prospects in a river are relatively minor.

It asserted that the overall impact of climate change on the power output of the indicative least cost expansion plant is expected to be positive over the period of assessment.

The World Bank independent engineers have ensured that the technical viability of the project matches with international environmental standards. Lenders are ready to fund the project since it is economically and financial viable.

An economic and financial evaluation study commissioned by the World Bank last year concluded that the commissioning of Bujagali in 2011 with a generation capacity of 250 MW is the least cost expansion power plan.

Uganda is facing a 24-hour power cuts as hydropower generation from the Kiira and Nalubaale power stations dwindled to 120MW from installed capacity of 380MW due to prolonged drought.

The government procured 100MW thermal plants to mitigate the impact of load-shedding on the economy. However, thermal generation is thrice expensive as hydropower.

Source: Xinhua