18 May 2009

Uganda: German Firm Gets Sh8 Billion Isimba Power Deal

Kampala — THE energy ministry has awarded a $3.8m (about sh8.7b) contract to a German firm to carry out feasibility studies for the development a 100MW hydro-power project at Isimba on River Nile.

Fichtner GMBH & Company will also make designs for the power plant and transmission line, environmental and social impact assessment and a resettlement plan.

The firm was best bidder in the open international bidding done by the ministry. Bharat Heavy Electrical, an Indian firm, has shown interest in developing the plant. The Indian government has also agreed to provide a $350m (about sh560b) loan for the project.

The move is part of the short and medium-term measures to ensure efficient and reliable power supply at affordable prices.

Uganda's electricity supply is 316MW, yet the country requires about 580MW to sustain the economy, which has been growing at 7% per annum.

The Government has also bought intellectual property rights for the development of the Karuma hydro-power project to accelerate power generation.

This will pave way for the procurement of a new contractor, expected to start work in June. This followed last year's expiry of Norpak's exclusive rights to develop the Karuma project and its eventual pull-out due to indebtedness.

The procurement process for a consultant to carry out feasibility studies, make designs and prepare tender documents for the project, is at an advanced stage.

The process is expected to be concluded by the end of this month. Construction of the 250MW Bujagali hydro-power project is also on schedule.

The first 50MW from the plant is expected to be commissioned in the third quarter of 2010. Japan has also agreed to send hydro-power experts to assist the Government to prepare the construction of the proposed 500MW Ayago hydro-power project.

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