Regional power pool starts in 2011

Published on August 22, 2007, 12:00 am
By Samuel Otieno and Samson Ntale in Kampala

The three East African states will soon have a power sharing pool to ease shortages.

Ugandan President, Mr Yoweri Museveni, said the strategy is to build grid interconnections to enable power flow from places of abundance to power deficit areas.

The Aga Khan (right) and President Yoweri Museveni of Uganda (left) at Bujagali Hydropower project, 90Km east of Kampala in Mukono District. The power plant will provide 250 mega watts. Picture by George Mulala

“Over a short period of time, we are going to link with other three East African Community countries to form the pool which will enable the countries to serve each other incase of power deficit,” said Museveni.

He was speaking in Jinja on Tuesday during the laying of the foundation stone for the Bujagali Hydropower project, which was also part of the 50th anniversary of His Highness, the Aga Khan, the spiritual leader of the Ismaili Muslim Community.

The East African Power Pool project is expected to be operational by 2011 once the required infrastructure is in place. Plans are also underway to incorporate Rwanda, Burundi and the DR Congo, Museveni said.

Aga Khan regretted Africa’s failure to exploit its hydropower potential

Currently, Uganda imports up to 20 MW of power from Kenya following the drop of water levels at the River Nile.

The drop has led to a severe 12-hour electricity load-shedding daily in Uganda, resulting in a slow down in economic growth.

The Aga Khan said the problem extends well beyond Uganda, noting that Africa produces only four per cent of the world’s electricity. Bujagali is being constructed by Italian firm, Salini.

“It has been difficult to inject huge private investment capital in Africa. This a milestone that will ensure shortages of dependable power is history East Africa,” the Aga Khan said.

He regretted Africa’s failure to exploit its hydropower potential. Africa’s is a sixth of the of the world population, but generates only four per cent of the world energy, much of which is produced in North and South Africa.

“The great issue of development, everywhere in the world, is whether the power supply will grow more quickly than the economy, or whether the economic growth will outstrip the power supply,” he said.

Largest single infrastructure investment

Museveni said the project is the largest single infrastructure investment of the Aga Khan Development Network worldwide.

An analyst and a co-author of various studies on the impact of energy loss in Uganda, Mr Lukule said: “Bujagali is critical to our long-term economic plans. After it, plans to develop more power projects must be expedited”.

The project will be completed within 44-months, with the first 50MW unit to be fed in the national grid within 36 months, said Dr Kevin Karuiki of Investment Promotion Services.

It is financed by the International Finance Corporation ($130million), European Investment Bank Euros ($100 million, Africa Development Bank ($110million), and commercial banks Barclays and Standard Chartered jointly extending loans amounting to $115 million.

“Premised on Build, Own, and Transfer (BOT) principle, the Bujagali power project is based on a 30 year Power Purchase Agreement with Uganda Electricity Transmission Company,” Karuiki said.

BUJAGALI hydropower dam will cut the cost of electricity by more than half the current rate in the early stages of completion, His Highness Prince Karim Aga Khan has said.

WALTER WAFULA & JAN AJWANG JINJA

BUJAGALI hydropower dam will cut the cost of electricity by more than half the current rate in the early stages of completion, His Highness Prince Karim Aga Khan has said.
The spiritual leader of the Shia Imami Ismaili Muslims, who was in the company of President Museveni, was speaking at the ceremony to lay the foundation stone for the Bujagali Hydro-Electricity Power Project in Jinja yesterday.

The Aga Khan Fund for Economic Development (Akfed), through its Industrial Promotion Services (IPS) arm, is one of two key shareholders in the Bujagali dam project. The project is run under the Bujagali Energy Limited consortium. Sithe Global is the other partner. The Aga Khan said that today only 5 per cent of the total population of Uganda, and a mere 1 per cent of the rural population, have access to the grid supply of electric power.

And even those who have access to electric power have suffered the burden of doubled tariffs over the last four years, let alone massive outages.
“But 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,” he said of the 250MW Bujagali project which is scheduled for completion in 2010.

REAL HOPE: His Highness the Aga Khan (2nd R), his brother Prince Amyn Aga Khan (2ndL) and Prince Rahim Aga Khan (R) welcome President Museveni at the laying of the foundation stone for the Bujagali power project in Jinja. Photo by S. Wandera

An initial 50MW of electricity from the dam will be generated after 36 months from September 2007 when construction begins in earnest. Electricity prices will start dropping once that 50MW comes on stream. The prices will continue to reduce as the subsequent 200MW is released onto the national grid monthly in four phases.
The reduction in power tariffs would shrink the cost of manufacturing, encourage investment, employment, enhance development, and improve Uganda’s overall economic growth.

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.
The Ugandan government lent the project $75 million to commence work early enough as the international lenders processed the loan. The government also provided $17.5 million for resettling people along the Bujagali transmission line. Bujagali Energy Limited will pay the government back.

At a recent news conference, Dr Kevin Kariuki, the head of infrastructure at IPS, said Uganda is currently charged between 25-31 US cents for a unit (kilowatt-hour) of power.
“During the debt repayment period, tariffs will reach about 11 US cents per unit and over 30 years of approximately 6-6.5 US cents per kilowatt-hour,” Dr Kariuki said.
The soaring tariffs that Ugandans have endured in the previous years are partly associated with the high cost of generating thermal power. Thermal power plants in Kampala and Jinja currently produce 100MW by burning diesel.

These are supplementing the insufficient hydropower from Kiira and Nalubaale dams in Jinja. The country’s total power production currently stands at about 230MW while demand is estimated at 350MW. In other words, power supply has fallen behind economic growth.

The Aga Khan said that the current skyrocketing costs have worked to reinforce the cycle of poverty for millions, and badly impaired the ability of Ugandan companies to compete in international markets thereby curtailing the expansion of employment.
“The result of continuing power shortfalls can be a downward spiral of disappointment and discouragement,” he said.

The Bujagali power project is the largest single private sector investment in East Africa. It is also the largest independent power project in sub-Saharan Africa, and the largest single power investment ever made by the International Finance Corporation worldwide.

Bujagali Energy Limited has got all the money needed for the project from major world lenders. These include International Finance Corporation ($130 million), European Investment Bank (Euro100 million), African Development Bank ($110 million), Barclays Bank and Standard Chartered Bank ($115 million), Dutch Development Agency ($73 million), French Agency for Development ($73 million), and German Development Bank ($45 million).

Pictures – Mowlana Hazir Imam’s Visit to East Africa

Mawlana Hazar Imam greets leaders of the Ummah. Photo: AKDN/Gary Otte

Source: http://theismaili.org/ea_TZ_pics.asp?image=5

Pictures – His Highness the Aga Khan’s Golden Jubilee visit to Kenya, East Africa

Shemina Lalani-Adatia, Chairperson of ITREB for Kenya, presents a gift on behalf of the Jamat to Mawlana Hazar Imam. The crystal vase was hand-engraved by a Kenyan artisan with a baobab tree, a significant tree in African tradition and mythology. Inscribed on the vase is a saying from Hazrat Ali that says, ‘Every vessel narrows when filled – only the vessel of knowledge expands.’ On the base is a clock dial in Arabic; the lines of the vase form the shape of an hour glass, open at the top to symbolise the continuum of time and knowledge. Photo: Aziz Islamshah

Source: http://theismaili.org/ea_arrival_pics.asp?image=20