Kampala — THE African Development Bank (AfDB) is to lend $9m (about sh18b) for construction of the Buseruka hydro-power dam in Hoima to boost rural electrification.
Hydromaxx, a renewable energy firm, will build and operate a 9MW power plant that aims at providing affordable, reliable and increased power to remote areas.
Benedict Kanu, the AfDB Uganda field officer, said the Buseruka project would contribute to economic development by facilitating growth and social service delivery.
Hillary Onek, the energy minister, said the project was in line with the Government's efforts to increase rural electrification to 10% by 2012 from the current 2%.
"This will make the countrywide coverage about 25%. Energy will improve the quality of life in households."
"I appeal to other private investors to bid for other mini-hydropower sites. We have sites that can produce a total of over 60MW," Onek said.
Fred Kabagambe-Kaliisa, the energy ministry's permanent secretary, said the Government's priority was to increase the power generation capacity and boost the transmission network.
The project will cost $27m. The PTA Bank will provide $10m, while Hydromax will invest $8m. This had left a shortfall of $9m.
Meanwhile, the World Bank has approved a $75m International Development Association credit to finance the second phase of the Energy for Rural Transformation programme.