21 April 2003

Uganda: Bujagali Dam Gets Go-Ahead

Kampala — THE $520m Bujagali hydro-electric power project may soon take off following new developments in Washington D.C.

It is reported that the US Department of Justice (DOJ), which has for months been probing the developer, AES, over bribery allegations, has reportedly halted the investigations and given the American company a go-ahead.

"By halting the investigations, in essence it means that they have not found any incriminating evidence against AES," said a source.

"The American multi-national (AES), will now be free to access World Bank funding for the Bujagali project as it had planned," said the source.

"As a result of the latest development, on April 11, the AES board of directors met in Washington DC to discuss the issue. Now the directors have to go back to World Bank and negotiate for the loan," the source said.

Syda Bbumba, the energy and mineral development minister, said on Thursday, "That is the latest development on the long-awaited Bujagali project. But AES has not yet communicated to us officially." She said she had been informed that the the Department of Justice had also exonerated AES from corruption charges.

Bbumba said, "The matter is now on AES's side and we are just waiting for them. The problem has never been ours."

On Thursday, Fred Kabagambe-Kaliisa, the energy ministry's permanent secretary, told the parliamentary committee on natural resources that the DOJ had cleared AES of corruption allegations.

"They have found nothing substantial against AES that warrants prosecuting the company," Kaliisa said.

He was reacting to a concern by Umar Mawiya Lule (MP Kalungu East) during a meeting with the committee on natural resources on April 17.

Lule wanted to know how far the Bujagali dam project had gone.

Kaliisa said the Justice Department had completed its work.

He said further development on the project had been halted because the financiers wanted assurance that there was no problem.

"The plan is that AES is going to finalise its obligations with the financiers. This is planned this month and the timetable we have is that during the first week of May, the project will attain financial closure," Kaliisa said.

He added, "We are very optimistic that in June the project should resume."

The World Bank Group was waiting for the outcome of the DOJ investigations before approval of the Multilateral Investment Guarantee Agency insurance for the Bujagali project. The DOJ investigation followed reports that a contractor in the AES consortium, Viedekke of Norway, had paid a bribe to a former Ugandan minister.

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