Business and Finance

Uganda Suffers Chronic Electricity Shortages

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By Moses Ssemakula.

Uganda Will lose about 10 percent of its electricity due to a reduction in hydropower supply, an industry official said, putting further pressure on East Africa’s third largest economy and its ambition to become a middle income country by 2015. Uganda, which is hoping to become a top-50 oil producer, already suffers chronic power shortages due to an ageing infrastructure and years of under investment in the sector.

The country is also reeling from runaway inflation, a plummeting local currency and a spate of economic protests. Willy Turyahika, Deputy Manager at state-owned Uganda Electricity Transmission Company Ltd, said excessive water was being released through Owen Falls dam which is harmful to Lake Victoria.

Owen Falls, at the source of River Nile in Eastern Uganda, is the country’s oldest and largest hydropower dam with an installed production capacity of 380MW. “So the water department has decided to reduce the amount of water flowing through the turbines which will translate into 40MW less power produced,” Turyahika said. According to state-run power sector regulator Electricity Regulatory Authority (ERA), Uganda has a total installed capacity of 570MW but actual generation fluctuates below 400MW.

Uganda was last hit by a major power crisis in 2006 when drought lowered River Nile’s waters and cut Owen Falls’ output by half. To stem the crisis, the government procured three thermal power plants of 50 MW each but one was decommissioned early this year after its contract expired.

Turyahika said the government was frantically exploring some emergency measures. “Discussions are under way and some mitigating measures are being mooted but the sad reality is that outages will continue until Bujagali dam comes online,” he said. The 250MW Bujagali hydropower dam, currently under construction at the River Nile, will cost about $860 million and is expected to come online in portions, staring with 100MW production capacity by the end of this year.

President Museveni says his government is banking on utilising petrodollar earnings from its crude oil reserves to develop adequate production capacity. Construction of the USD.2bn Karuma hydropower dam on River Nile in northern Uganda, one of the East African region’s biggest power projects, is expected to commence early next year.

It is expected to have a production capacity of 700 MWs. The government has said it intends to develop it as a public-private partnership venture and allocated 828 billion shillings for it ($294.3 million)in 2011/2012 budget.

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