Kampala — THE 50MW Lugogo thermal plant extension contract is expiring on Sunday, paving way for cheaper heavy-fuel oil generators.

The expiry is in line with the Government's plans to phase out expensive thermal plants and replace them with heavy-fuel oil plants to keep tariffs down.

Heavy-fuel oil thermal power is twice cheaper than ordinary diesel generators.

A unit of power from Lugogo is at $25 cents compared to the Namanve heavy-fuel oil thermal plant where a unit will be at about $14 cents.

In May, the Uganda Electricity Transmission Company and Aggreko International signed an agreement to extend the Lugogo plant for three months.

This was in anticipation of another 50MW heavy-fuel thermal plant, which is supposed to be commissioned at Namanve by September.

The Lugogo deal was extended after expiry of the original three-year contract signed in 2005.

The Namanve plant is supposed to replace the Lugogo plant and prevent a return to the dreaded 48-hour loadshedding.

When Jacobsen Elektro, the firm building and installing the equipment at Namanve, was asked whether the plant would be ready by Monday, Dag Moen the managing director, said: "We shall have power. We already have 13-14MW because we are testing the machines. But we shall have more power next week."

"We are progressing according to plans. Final preparations are underway to provide 100% capacity of the plant," Moen explained.