China is back in the news in Uganda. This time it is because of its largest ever single investment in the East African country.
Sinohydro Corporation, a Chinese state-owned firm, has been contracted to construct a 1.4-billion-U.S.-dollar Karuma Hydro Power Plant in the mid-western Ugandan district of Kiryandongo.
Construction of the 600MW power plant was commissioned by Ugandan President Yoweri Museveni on Monday.
This project is the latest in line after several other Chinese firms have been awarded contracts to construct roads and several buildings in the capital Kampala.
Uganda is already benefiting from the government office buildings, hospitals and other projects funded by the Chinese government. Uganda's exports to China also receive preferential treatment.
Most major highways in the country are being constructed by Chinese companies, including the country's first ever 350-million- dollar expressway linking Kampala to Entebbe International Airport, the country's main gateway to the rest of the word.
Chinese companies, such as China National Offshore Oil Corporation, have entered Uganda's oil industry, whose revenue Uganda hopes to use to boost the country's transport and energy infrastructure.
Museveni seems to have found a partner - China, which also premised its fast economic development on availability of adequate energy and transport infrastructure, the key drivers of economic development.
According to the Ugandan government, power shortage is one of the main bottlenecks to unlocking the country's fast economic development.
"Ever since 1986, the Ugandan economy has been growing at the rate of 6.5 percent per annum. The economy could have grown at a much faster rate if we had the capacity to address all the strategic bottlenecks such as electricity," Museveni said while commissioning the construction of the Karuma Hydro Power Plant.
"Unfortunately, at that time, we did not have our own money and our partners from outside tended to put frivolous points ahead of the substantive needs of developing infrastructure," said the president.
Funding from China to Uganda comes in different forms ranging from loans, grants donation of office buildings, hospitals, medical teams and military support.
China's increased aid to Uganda comes at a time when western aid to the East African country is dwindling, partly because of the economic crisis the donor countries are facing and also corruption, which the government has persistently said is fighting.
Uganda is currently funding 85 percent of its national budget and the rest is from foreign aid.
"Our Chinese friends also have, not only the technical capacity, but financial capacity as well on favorable terms. Chinese lending is also completely free of the usual meddling and high-handedness of some of the friends from outside. They also focus on the primary sectors of the economy such as infrastructure instead of focusing on secondary sectors of national life," Museveni said.
Maria Kiwanuka, Uganda's finance minister, told reporters here that contrary from the thinking of Western donors, there is no evil in accessing Chinese money, noting that in China, Uganda and Africa at large have found a true partner.
"Their interest is in getting a long-time development partner right in the heart of Africa," she said, noting that China's loans have low interest rates and a long pay back period.
Irene Muloni, Uganda's energy minister, argued that it makes business sense that one would go for the inexpensive but high quality technology that China has in comparison to the equally high quality but Western technology.
"China is very advanced in technology, so when you look at advanced technology and the cheap financing, then you have got what you are looking for," she told reporters here on Monday.
Museveni argues that Uganda and the rest of the world needs to learn from China that one has to save and rely on internally generated funds to fast track development instead of focusing on external aid.
"I salute this partnership with China. Ugandans need to be reminded that we must constrain consumption, in the short run, in order to fund our own development. What the Government of Uganda has been able to do in the electricity sector -- building transmission lines by using the money we saved from the Energy Fund is an eye-opener," he said.
While Chinese aid has been welcomed in Uganda and Africa at large, there are concerns about the quality of Chinese products, mainly stemming from the fake products purportedly made in China.
The Chinese embassy here argues that the country is strict on exporting products to any part of the world, noting that Chinese nationals caught exporting counterfeit and substandard products to Uganda are to be imprisoned for 20 years.
This is part of a host of other heavy punishment that Chinese companies or nationals may face for dealing in counterfeit products.
Duan Xiaoping, who represented Sinohydro Corporation, the contractor of the project, said the project will be completed in time and will be of a high quality.
"We will bring our advanced technology and standard to this project. We assure the local people and government that the dam will be safe," he said. "This project is very important to this country. It is the biggest one in East Africa and we know that Uganda will have enough electricity."
Muloni, the energy minister, said that a team of experts has been put in place to monitor the construction of the power plant on River Nile.
"To ensure the successful implementation of this project, there is a strong team in place to closely work with the project engineering, procurement and construction," she said.