Kampala — The African Development Bank (ADB) has allayed fears that it would withdraw its funding for the 250MW Bujagali Hydropower project.

This follows last week's claim by an NGO - International River Network (IRN) and its partner, the National Association of Professional Environmentalists (NAPE) that the bank' s investigation team found several flaws in the project.

"Investigation by the ADB panel found that the dam studies minimised climate change risks, impacts to Lake Victoria, resettlement costs, affordability concerns," said IRN in a press statement.

ADB, however, said that the findings of the bank don't invalidate the project.

"It does not make us cancel our loan or support for the project," said Mukaila Ojelade, ADB Country Representative.

Ojelade Ugandans should not worry since the bank has approved the project. He further commented that the bank graded the project on strength of economic, financial and social assessments.

The probe followed a letter written to the bank by NAPE in May 2007. The environmentalists alleged that the cost of the project at $750m (shl.25b) is exaggerated and that the power would be unaffordable by an ordinary Ugandan.

The Bujagali II hydropower project is one of Uganda's efforts to address a crippling energy crisis caused partly by drought that has more than halved hydropower generation to 145MW against an installed capacity of 380MW.