The construction of Karuma and Isimba hydro power dams are expected to boost the availability of electricity in the country, and spur the much-needed seven per cent economic growth that Uganda is targeting in the medium term, government officials say. Currently, Uganda has a total installed capacity of just over 800 megawatts. The current supply is estimated at just over 500 megawatts. The demand for electricity, meanwhile, is growing at 10 per cent, which means the generation capacity is still insufficient to match the demand.
Karuma, once completed in about five years, is expected to add 600 megawatts to the national grid. Isimba will add an extra 183 megawatts, with the project being completed around the same time like Karuma. Other power plants being planned include: Ayago at 600MW, Oryang 400MW and Kiba 200MW.
Last week, President Yoweri Museveni was the main guest at the ground-breaking ceremony for the construction of Isimba hydro-power station in Busaana sub-county, Kayunga district. China International Water and Electric Corporation (CWE), a Chinese firm, will construct Isimba hydro power dam. CWE is the company that bitterly lost out to its fellow Chinese company, Sinohydro, while bidding for the construction of Karuma power dam.
The cost of the Isimba plant and its associated substation will cost $556m, while the transmission line will take $11.7m, according to a press statement from State House.
President Yoweri Museveni applauded China for supporting Uganda's infrastructure.
"Isimba power station will provide electricity, especially to run industries in Uganda. I thank the government of China for their support in the construction of both Karuma and now Isimba. I thank you, too, people of Kayunga for supporting industrialisation. This dam will support a bridge which will open up both Kamuli and Kayunga districts to the rest of the country across the River Nile," he said.
A total of 2,867.6 acres will be required for the dam, substation and reservoir construction work. The government of Uganda will finance the Resettlement Action Plan and its implementation. Both Karuma and Isimba hydropower projects will be financed by concessional loans from the Chinese government, according to the statement.
Zhao Yali, the Chinese ambassador to Uganda, thanked government for awarding the contract to CWE.
"As His Excellency Yoweri Kaguta Museveni has mentioned many times before, electricity shortage has always been a bottleneck for the development of Uganda. The enhancement in the electricity sector is like the engine of the jet plane, which will boost the development of the Ugandan economy," Yali said. CWE has promised to train and employ Ugandans.
Irene Muloni, the minister of Energy and Mineral Development, said the Chinese firm would tap into the local labour, and create opportunities for the people around.
"During construction, both districts will provide labour and construction materials to the project. As provided for by Section 76 of the Electricity Act, 1999, both Kamuli and Kayunga districts will receive royalties, which will accrue from the production of electricity. This is estimated at a maximum of Shs 212m per annum to be shared between the two districts," she said.