Energy (111)

World Bank Boosts TZ Rural Electrification With $200m Loan

The World Bank board of executive directors last week approved a financial package of USD 200 million for the Tanzania Rural Electrification Expansion Programme from the International Development Association (IDA). The loan will boost rural electricity connectivity. 

The new financing is a big boost to the project that is expected to connect up to 2.5 million households in rural areas to the national electricity grid over the next five years, according to a statement from the WB headquarters in Washington.

“The programme aims to build on the recent achievements of expanding nationwide access to 36 per cent in 2014. In addition, the Programme will scale up the supply of renewable energy in rural areas while strengthening sector institutional capacity,” said Bella Bird, WB country director for Tanzania, who also covers Malawi, Burundi and Somalia.

“Access to electricity is critical to extend economic opportunities and reduce poverty...this programme not only offers the opportunity for many more Tanzanians to have access to power in their homes and businesses, but also enables small power producers to access finance to invest in production, including renewable energy sources.” 

The government of Tanzania is currently implementing a national energy policy whose goal is to increase the country’s overall electricity connectivity to 50 per cent by 2025 and to at least 75 per cent by 2033. 

The National Rural Electrification Programme (2013–2022) under which the new programme is to be implemented, includes both on-grid and off-grid solutions and has four priorities:  the connection of new customers to the grid in already electrified settlements; new connections to the grid; electrification through off-grid investments; and the development of distributed technologies, in particular off-grid solar and other renewable technologies.

In addition to household beneficiaries, Institution’s financing will also, in part, benefit 25,000 education facilities, 25,000 health facilities, 150,000 businesses. And Small Power Projects would also benefit from access to capital to enable them to contribute 33MW in renewable energy under the programme.

ERA To Consult With Public Over Kasese 6MW Hydropower Plant

The Electricity Regulatory Authority (ERA) will hold a consultative meeting at Musasa Church of Uganda in Musasa Village, Kyondo Sub-County in Kasese District to discuss the pending application for a License by Nyamagasani II HPP Ltd to construct, generate and sell electricity from the proposed 6 MW hydropower plant across River Nyamagasani in Kasese District.

According to a public notice issued by the regulatory body, government agencies, electricity sector stakeholders and persons affected by the application are invited to attend the hearing to be held on the 28th day of July 2016.

“All stakeholders and affected persons wishing to make a presentation and or comments before the Public Hearing may register and or submit their respective comments to the Secretary to the Authority at the address above not later than the 26th day of July 2016.” The notice reads in conclusion.

Kasese district is home to a couple of small hydro power project including finished Bugoye Power Station,  Mubuku I Power Station, Mubuku III Power Station, all on River Kibuku and Nyamwamba Power Station on river Nyamwamba.

Karuma Dam Project Progressing Well, Says Energy Ministry

The construction of Karuma Hydroelectric Power Station, a 600 megawatts hydroelectric power project, is ‘progressing well’, a report by Energy and Mineral Sector Working Group (EMSWG) observed.

A team from the Energy and Mineral Sector Working Group led by the Permanent Secretary for Ministry of Energy and Mineral Development Dr. F.A Kalisa Kabagambe visited Karuma Hydro Power Plant on 1st July 2016 to assess the ongoing work.

The team found out that the work on this dam is progressing well with the excavation of power, main transformer caven and surge chambers, ventilation shafts, cable vertical shafts fixed, steel reinforcement works and concreting for the dam is also running and furnishing of employer's camp is ongoing.

The work covered so far is 27% and the first unit is expected to be commissioned in 2018 the energy ministry said in a report.

The Karuma project has been under scrutiny especially from President Museveni who has been told the contractor Sinohydro Corporation China from China was doing a shoddy job including cracks into the walls built.

The president directed the Energy Minister Irene Muloni to start an inquest into the matter. Following investigations, President Museveni suspended engineers working at Karuma and Isimba dams over the cracks.

However A team of dam construction experts from Sinohydro said the cracks which were reported on the spillway at the Karuma are just “common cracks in construction industry” which are remediable and therefore won’t affect the overall functionality of the 600MW dam.

Chinese Bank To Spend $100m On Uganda Power Projects

Uganda Electricity Transmission Company Limited (UETCL) has said the country will spend $100m on construction of transmission lines connecting four mega sub-stations at Luzira in Kampala, Namanve in Mukono, Mukono, and Iganga industrial parks to consumers in different parts of the country.

The construction works will be conducted by China CAMC Engineering Co. Limited, a Chinese firm, in 30 months. The money to fund the project has been provided by Exim Bank of China as a loan. Refunding of the money to the Bank will be done in 15 years, with a three years grace period, at an interest rate of 2.5 percent per annum.

This is according to a memorandum signed between government of Uganda and Exim Bank in 2013. 85 percent of the money will be spent on construction of the sub-stations while 15 percent will be used for resettlement. During the process, buildings, farms, properties and homesteads will be destroyed.

“We know some buildings and pieces of land may be affected during the construction of the transmission lines. The lines will pass through open spaces not on top of buildings thus calling for resettlements.” Mark Namungo, the senior power analyst at the Uganda Electricity Transmission Company Limited (UETCL), told a press conference.

The land titles on which the sub stations will sit have been secured by UETCL and China CAMC Engineering Co. Limited, the contractors. Namungo is confident the contractors will do a good job leading to reduction of power losses due to efficient transmission of energy on the 132KV voltage level compared to the current transmission of 33KV.

Yang Guo Liang, the CAMC project manager, speaking to journalists at a press conference confirmed that the project will be completed in a period of 30 months. “We hope to complete this project in 30 months period. We have so far constructed over 100 power dams and sub-stations in Asia, Europe and Africa.” Liang said.

The project  works include construction of 15km of 132kV double circuit metallic transmission line from Namanve South Industrial Sub-station to Luzira Industrial Park Sub-station, and construction of 132/33kV, 3x32/40MVA Luzira Industrial Park.

Construction of approximately 8km of 132kV double circuit metallic transmission line from the existing 132kV Nalubaale-Namanve transmission line to the proposed Mukono Industrial Park sub-station and construction of 132/33kV, 3x40/63MVA Mukono Industrial Park.

Construction of the approximately 10km of 132kV double circuit metallic transmission line from existing 132kV Bujagali-Tororo transmission line to the proposed Iganga Industrial Park sub-station and construction of 132/33kV, 2x32/40MVA Iganga Industrial Park.

Construction of approximately 5km, 132kV double circuit metallic transmission line from the existing 132/33kV Namanve sub-station and 132kV Nalubaale-Namanve transmission line to the proposed Namanve South Industrial Park sub-station and construction of 132/33kV, 3x40/63MVA Namanve South Industrial Park.

Museveni Vows To Bring Electricity Costs Down

The government of Uganda is working towards harmonizing electricity tariffs and make the utility product cheap for both domestic and manufacturing, President Yoweri Kaguta Museveni said Tuesday during his State of the Nation Address at Serena Hotel in Kampala.

Currently the two leading producers of electricity Nalubaale and Bujagali sell electricity at different prices.  Nalubaale sells at 1.04 US cents per unit while Bujagali is at 11UScents per unit. These prices are still on the high. Consumers especially manufacturers continue to complain saying these high prices leave them will little profit.

“By a combination of measures, we shall resolve this handicap in a win-win way. The future electricity stations, especially, the big ones, will never be expensive in the same way.” The president stated.

The cost of power and supply deficit have been a mainstay despite the power generation capacity and volume increasing. The supply is increasing with every project government is undertaking. Uganda now has a generation capacity of 850mgws of electricity compared to the 60mgws of 1986.

President Museveni promised that an extra 1000mgws of electricity will be added onto the national grid in the next five years by working on Karuma, Isimba, the minihydros, the geo-thermal in Lake Katwe, the gas-powered stations and those using HFO (Heavy Fuel Oil).

“We already have a surplus of 100mgws during even the peak hours in the evening (6:00p.m to 10:00p.m). At night only 350mgws is consumed. During the off-peak hours of the day, 500mgws are consumed. Therefore, during the night hours after 10:00 p.m., the surplus is 500mgws.

“That is why I would encourage some factories to work at night. The only problem we have are the high prices of electricity caused by the expensive money the Bujagali developers used. We shall get a solution for it.

“With this better base of electricity and the improved roads, we are now, for the first time, in a position to decisively tackle the haemorrhage by attracting and incentivizing investors that will save the huge money in dollars that we are currently donating to India, China, UAE, Japan, EU, USA, etc. ─ a total of US$5.528 billion per year.

“This huge amount of money goes for textiles (US$888million), leather goods (US$0.22million), fruit products (US$20.2million), second hand cars (US$568.7million), carpets, etc. etc. All these can now be made here.

“Fortunately, the investors are there. They just need a good atmosphere for investing. What is the good atmosphere needed? First of all, now that the electricity is abundant, we need to ensure that it is cheap for, at least, manufacturing ─ not more than 5 US cents per unit. This, we have started implementing.” The president confirmed.

Sinohydro Promises Hospitals For Karuma Community

The contractor undertaking the construction of Karuma Hydroelectric Power Station has pledged to construct hospitals to help residents of Karuma community. Chinese construction firm Sinohydro Corporation is undertaking the construction of the 600MW dam.

“In the next 3years, we will commit to construct hospitals and schools worth millions of dollars for the communities which together with Karuma Project will form a significant part of our monument”. Deng Chang-Yi the Deputy Manager of Sino Hydro said.

Deng Chang-Yi was speaking at Karuma Primary school in Northern Uganda during an event at which the Corporation offered free medical care and treatment to hundreds of resident from both banks of Karuma dam.

The medical day, which is part of the Company’s CSR initiatives, saw a team of Chinese Medical Experts including doctors and nurses from China, spend Saturday diagnosing a myriad of ailments and administering treatment to the people of Kamdini and Kiryadongo districts.

Deng Chang-Yi said the Company’s mandate has not ended with construction of the dam but also extended to improving the living conditions of the people around the project area. He added that they have integrated CSR in their operation and strategic planning.

“The neighboring communities have been with us every step of the way. As a gesture of good will and part of our commitment to “give back” to the supporting communities. To date, we have made donations of school supplies and learning materials to Karuma Primary School, drilled boreholes and wells for the Village around Karuma.

We have also renovated several access roads for the adjoining villages and provided road accident rescueincluding the initiation of this Free Medical Service. All these activities are aimed at enhancing our bond and fostering a harmonious environment,” Deng Chang-Yi said.

Isaac Mwesigwa, Uganda Electricity Generation Company limited (UEGCL)’s Sociologist, hailed Sinohydro for the good gesture of providing free medical services to communities but urged them to keep it in regular basis.

He said government is working on a Community Development Action Plan that will see most of the health centers in both banks of the project upgraded. Chu Mao Ming, the Political Counselor of the Chinese Embassy in Uganda said the Free Medical Day was a demonstration of the cordial relationship Uganda has with the People’s Republic of China.

Karuma Dam Spillway Cracks Remediable – Experts

This will come as good news to President of Uganda Yoweri Kaguta Museveni who had lost patience with the engineers working on the Karuma Hydropower Project. The president accused the contractor of the 600MW dam Sinohydro Corporation China of poor performance when the infrastructure developed cracks.

In March, 2016, an angry Museveni summoned the line minister Irene Muloni and tasked her to correct the wrongs of the contractors. In a reactionary move, experts from Sinohydro Corporation China were brought in to study the mishaps.

And now, a team of dam construction experts from Sinohydro has said the cracks which were reported on the spillway at the Karuma Dam currently under construction are just common cracks that happen in the construction industry and are remediable.

The experts say that the cracks which had caused panic therefore won’t affect the overall functionality of the 600MW dam. This assertion is contained in a report the experts handed over to Uganda Electricity Generation Company Limited (UEGCL) this week following three weeks of intensive investigations.

Following a visit to the dam recently, the Minister of Energy and Mineral Development Irene Muloni instructed that work on the Spillway be put on hold and investigation be carried out to ascertain the impact of the Cracks on the overall functionality of the dam. 

Acting on the Minister’s directive, the team of Experts from Sinohydro, led by Mr. Yang Yixin arrived in Uganda on 20th April to carry out detailed investigation and has handed over a report with remedial steps to be taken to Uganda Electricity Generation Company Limited (UEGCL).

“The cracks after treatment with appropriate methodology shall have no adverse effect on the overall dam structure and its functionality. Sinohydro has commenced the procurement of equipment and materials for the treatment of cracks”, the report stated.

According to the report, the experts in a course of three weeks worked in conjunction with over 30 specialists in design and construction of concrete works on the ground and in China to analyze the causes of cracks and formulate remedial measures.

The team was to draft draft preventative/improvement measures to be adopted in concrete works construction based on the study of the drilled cores and construction methodologies and finalized the Report on Dam Concrete Crack Analysis and Preventative/Improvement Measures and submitted to OE, UEGCL and the Owner for assessment and approval within the one month time prescribed by the Minister of Energy.

Korean Firm To Build 40MW Power Plant In Uganda

Uganda’s electricity production will increase by 40MW a year if Zion Korea Limited Company, a firm from South Korea, goes ahead with their plans of investing in the country’s energy sector. The company’s delegation was in Kampala last week to meet the country’s leader President Yoweri Museveni.

According to a statement released by the president’s office, Museveni told his guests, who were led by the Chief Executive of the South Korean company, Jeon Koang Woo, that the ambitious investment plans are in line with the government’s efforts to create wealth and jobs.

Jeon Koang Woo said their company aims at building a power plant in Uganda with an output capacity of 40 Megawatts annually offering direct employment opportunities to 2,000 employees and indirect working opportunities to 3,000 workers. He also added that the company, in addition to direct power production, will manufacture solar panels and batteries.

Museveni, therefore, observed that the power plant investment venture that the South Korean entrepreneurs are going to establish in Uganda is welcome. The President emphasized that Uganda needs more power production ventures in order to ensure that industrial establishments and wananchi (citizens) access electricity at favourable cost per unit.

Uganda’s electricity demand has been growing at an average of 10% per annum which has led to occasionally power outages because the supply is low. To curb this deficit, Uganda with the help of developing partners and developers are undertaking new projects that will substantially increase supply.

At the moment Uganda produce hydroelectricity power at Adekokwok Hydroelectric Power Station (8MW), Bugoye Power Station (13MW), Bujagali Power Station (250MW), Kabalega Power Station (9MW), Kanungu Hydroelectric Power Station (6MW), Kiira Power Station (200MW), Mpanga Power Station (18MW), Mubuku I Power Station (5MW), Mubuku III Power Station (10MW), Nalubaale Power Station (180MW), Nyagak Power Station (3.5MW), Kisiizi Power Station (0.3MW) and Gwere-Luzira Power Station (0.5 kilowatts).

Some of the projects under construction include Isimba Power Station (183.2MW), Karuma Power Station (600MW), Nyagak III Hydro Power project (5.5MW) and Maziba Power Station (5MW). Uganda also proposed to develop 13 hydroelectricity power projects including Ayago Power Station in Nwoya district that will produce 600MW. Once all these projects are operational, the country will substantial power supply and a low cost.

Museveni Suspends Karuma Engineers


Three Ministry of Energy and Mineral Development engineers working 600MW Karuma Hydropower Project on the Kampala – Gulu highway have been suspended over shoddy work. The call to suspend the underperforming engineers was made by President Yoweri Museveni on Wednesday.

According to Chimpreports, a local news website, the affected officials are Principal Energy Officer Eng. Henry Bidasala – Igaga, Eng. Cecelia Menya, former Ag. Permanent Secretary Eng Paul Mubiru, and unnamed Ministry’s Senior Accounting Officer.

The website also mentioned that the permanent secretary ministry of energy Kabagambe Kaliisa was interrogated by a team from the president’s office and was likely to lose his job. Kabagambe couldn’t readily be reached to verify the news but recently the president wrote to Irene Muloni the energy minister asking her to review the work being undertaken at Karuma and Isimba Hydroelectric Power Station.

In the letter, a tough talking Museveni said he had “got disturbing reports that the work being done on the dams of Karuma and Isimba is shoddy because the 'owners' engineers' are either not serious or they have some other issues.” Museveni asked Muloni to suspend the project if there was need.

“Mistakes are being observed at Karuma. The 'owner's engineers' are informed but they do nothing. I, therefore, direct you to, at once, confirm if these stories are true so that you stop further and more irreversible mistakes,” the president wrote in the letter date 22 March, 2016.

He added: “If it is necessary to suspend work until the defects are corrected, it should be done. The 'owners' engineers' could either be re-enforced or even dismissed.” Karuma was contracted state owned Chinese firm called Sinohydro Corporation. It is being funded by Exim Bank of China.

One of the affected engineers, Principal Energy Officer Eng. Henry Bidasala – Igaga, during a field tour with journalists recently said that Karuma would be ready by December, 2018 when the six turbines will be up and running. He told journalists that 30 percent of the construction work was done including excavation works.

Norwegian Firm Set For Partial Bujagali Takeover


Norwegian Hydropower Company SN Power is set to buy into Bujagali Hydropower Project, a new report released this week has indicated. The state owned Norwegian firm has agreed with SG Bujagali Holdings (SGBH) from Mauritius on the sale of the latter’s partial interest in Bujagali.

Bujagali is a 250 MW hydropower facility located in Jinja, Uganda.  It was developed, financed and will continue to be operated by Bujagali Energy Limited (BEL), which is owned by affiliates of the Aga Khan Fund for Economic Development (AKFED), SGBH and government of Uganda. 

The affiliates of AKFED and GOU will retain their interests in Bujagali.  The project’s debt financing arrangement with its lenders, including development finance institutions such as the African Development Bank, World Bank Group and European Investment Bank, will not be affected by the transaction.  

The acquisition will provide a platform for SN Power to develop additional hydropower projects in Uganda and Sub-Saharan Africa.

Thomas DeLeo, Director, SGBH revealed that SGBH has owned its interest in the Bujagali project in Uganda for eleven years, through initial development, construction and full operation. He said they are extremely proud of the contribution the project has made catalyzing transformation of the country’s power sector. 

“Uganda has incredible potential, and we have seen myriad ways in which Ugandan businesses and consumers have benefited from reliable electricity since Bujagali came online.  Now that we have completed our goal of proving Bujagali’s operational strength with operations above a 99% contractual availability over the past 3 ½ years, SN Power will be the ideal partner to continue this legacy for Uganda, given its world-class operating capabilities, global portfolio, financial strength, and proven commitment to the highest social and environmental standards.“ 

Torger Lien, Chief Executive Officer, SN Power explained that they look forward to a strong and enduring partnership with the Government of Uganda, as well as the operating and lending partners of Bujagali Energy Limited, in contributing to the critically important goals of materially enhancing Uganda’s installed generation capacity and providing a greater share of Ugandans with access to electricity.  

“With consistent power, businesses can grow, agricultural producers can prolong the shelf-life of their products, hospitals and clinics can better provide for their patients, and schools can keep the lights on for a new generation of students.  SN Power is seeking a long-term investment in Uganda that will sustain Bujagali’s transformational, positive impact.” 

The Bujagali Hydropower Project is widely considered the most successful public private partnership in the power sector in Sub-Saharan Africa and has been used as a model for subsequent projects in the region.  Bujagali was commissioned in August 2012, putting an end to years of constrained economic growth caused by an insufficient and unreliable power supply in Uganda.  

Key improvements include: 

  • Bujagali replaced thermal generation that cost over 30 US cents/kWh with renewable power at 11 cents/kWh, enabling the GOU to discontinue annual subsides that cost Uganda USD 175 million per year and to channel these savings toward other crucial public sector investments.
  • Over Bujagali’s nearly four years of operations, the project has provided a reliable backbone for the Ugandan grid, averaging over a 99% contractual availability factor and generating half of the country’s power supply.
  • Of critical importance to Uganda’s economic competitiveness, Bujagali reduced the marginal cost of electricity generation by 66%, catalyzing strong economic growth since coming online. 

The project sponsors, led by IPS an affiliate of AKFED, were selected in April 2005 through an international competitive tender overseen by the GOU based on the lowest return on equity.  At the end of the concession, Bujagali will be transferred to the GOU for one US dollar with an expected remaining life of 70+ years.  

SN Power, which is owned by Statkraft and Norfund, is one of the world’s leading international hydropower firms.  With Statkraft, SN Power has a strong industrial foundation built on more than 120 years of developing, owning and operating hydropower projects in Norway and abroad.  

Statkraft is wholly owned by the Norwegian state and is the largest renewable energy and hydropower company in Europe, with a total installed capacity of more than 18,000 MW.  Statkraft’s gross sales amounted to USD 8.7 billion in 2014.  

Norfund is a Norwegian development financial institution, which invests in private enterprises in Africa, Asia and Latin America.  Through Norfund, SN Power has access to significant experience and expertise in conducting investments in emerging markets, particularly in Uganda and Eastern Africa.  SN Power’s investment in Uganda will complement the company’s commitment to building sustainable hydropower in Africa, building on prior investments in Zambia’s Mulungushi and Lunsemfwa Power Stations. 

SGBH, a company incorporated and doing business in Mauritius, is one of the original shareholders of BEL and an affiliate of Sithe Global Power, LLC (“Sithe Global”), an international power development company.   

Sithe Global is led by a seasoned management and technical team with extensive experience developing and operating large scale, socially responsible power generation projects.  The Sithe Global management team has successfully developed over 50 power projects in nine countries with a capital investment in excess of USD 5 billion.

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