Posted: Tue May 26, 2009 2:57 am Post subject: BUJAGALI HYDROELECTRIC POWER PROJECT
First Unit from Uganda’s Bujagali Power Plant to Start Up Late Next Year May 25, 2009
Posted by ismailimail in Africa, Fund for Economic Development, Uganda.
22 May 2009 Thomas Pearmain Global Insight Daily Analysis
Uganda’s Bujagali hydroelectric power (HEP) project could start generating 50MW from its first unit before the end of next year, as the facility is brought online in a unit-by-unit commissioning programme. Domestic newspaper New Vision reports that the project is 30% complete and Glenn Gaydar, the project director stating that excavation of the entire left channel and construction of the power house had been completed. Work has now started on the spillway and the Bujagali sub-station.
Significance: Construction of the Bujagali HEP got under way in June 2007 and at full capacity it should be able to generate a maximum capacity of 250MW. A control building and machine hall will house the five 50-MW generating units and the project should be fully commissioned in 2011. Bujagali Energy Ltd (BEL), a consortium of the Aga Khan’s Industrial Promotions Services and the U.S.-based company Sithe, is developing the project.
Italy’s Salini Construttori was awarded the engineering, procurement, and construction contract and Salini subcontracted Alstom, a French firm, and Fischtner, a German company, to design and execute the works. Currently, low water levels on Lake Victoria and a lack of rainfall have led to predictions that the generation potential of the Bujagali project could fall to 175MW. The project was given the go-ahead by the World Bank, which approved around US$360 million in loans for the project. The cost has now risen to nearly US$800 million, according to estimates.
THE cost of Bujagali dam has not gone up, the leading co-sponsor, Industrial Promotion Services (IPS) of the Aga Khan Group, has clarified.
“The project cost was all along $860m. This comprises $568m in engineering procurement and construction cost and $292m in development, land, contingency and financing cost, including interest, among others,” said Kevin Kariuki of IPS in an interview with Saturday Vision.
He acknowledged that brittle rock was found instead of solid rock in a key area of the construction site, making it necessary to undertake redesign and remedial works. “The adverse ground conditions only became apparent following investigative drilling after dewatering of the river’s left channel.” However, he said, this would be addressed within the agreed project cost, using the contingency allowance.
On allegations that the power tariffs are likely to go up after Bujagali becomes operational, Kariuki explained that the final price is not determined by the Bujagali investors but by the Electricity Regulatory Authority.
“Power generation is only one of the inputs in the tariff formulation. There is also the transmission and distribution cost, as well as technical and commercial losses.” The latter is mainly as a result of theft.
“For generation, the price is actually coming down. The average wholesale tariff for Bujagali will be 6 to 6.5 cents per unit over the next 30 years, which is the contract period.”
In comparison, Aggreko, the generator of thermal power, charges 16 cents per unit before fuel, according to the Electricity Regulatory Authority website. Including fuel, thermal power comes to over 30 cents.
Still according to the ERA website, Jacobson charges 18.5 cents per unit for the generation of heavy fuel oil.
IPS rubbished allegations that Bujagali is the most expensive dam in the world.
“Comparing dams is absurd,” said Kariuki. “There are very many parameters to look at, among them the mode of financing – is it publicly or privately financed, the location of the project and therefore the proximity to raw materials, and the structures involved. Does it require a dam and if so, what type of dam is required – concrete, rock-fill or earth?”
He pointed out that Bujagali is the first privately financed power project in sub-Saharan Africa.
He also noted that the Ethiopian hydro-power project it was compared with did not entail the construction of a dam and instead utilised water from an upstream constructed earlier.
“You also look at the economies of scale – the larger the project the lower the cost per unit. Finally, you look at the time of construction. In 2006, when Bujagali was being procured, the cost of most materials was 200% higher than what it was in 2002.”
He pointed out that the assessment done by the lenders independent engineer had concluded that, given the prevailing market conditions, the Bujagali cost was “reasonable”.
The lenders for the project include the World Bank Group, the African Development Bank, the European Investment Bank, and other European financing institutions comprising KfW/DEG bank of Germany, FMO of Holland and AFD/Proparco of France.
On recent statements of energy minister Hilary Onek calling Bujagali a bad project, Kariuki said: “I do not understand why the Government can say that the project is bad or overpriced when in actual fact, the Government approved the entire project, including project cost and terms of financing. Nothing has changed between now and then.”
Workers on the Bujagali dam which is scheduled for commissioning next year
By David Mugabe
THE Bujagali hydro-power project is expected to be ready next year, according to the project director of Bujagali Energy Limited. The first parts of the turbines were installed earlier this week and civil works on the power house, the overflow and the spill gates were in final stages when Saturday Vision visited the site.
“The exact date of commissioning will be announced by the Government but we are expecting it to be some time next year,” said project director Glenn Gaydar.
He said the procurement of the turbines, generators and other electrical appliances was 95% complete.
The project will be on schedule despite a low-quality rock found at the site, which forced the developers to remove it and replace it with an artificial rock made of concrete and steel.
The weak underground was only discovered after the flow of River Nile had been diverted and the western bank had been drained.
“You can’t see what is under the water. That is one of the risks with hydro-power projects,” explained Gaydar.
The contractor did not want to take any risks, the more as the rock was located just after the gated spillway. “There was a risk that the water, coming out with great force, would destroy the rock, create a hole and undermine the integrity of the dam,” he said.
Dozens of workers could be seen laying the concrete and steel slab, the size of almost two football pitches, where the rock had been removed.
Earlier, the workers cleaned every inch of the base with brushes to stop possible seepages, a tedious and time-consuming job.
Despite this setback, the project cost will remain within the contract sum, Gaydar said. “The cost will be covered by our contingency funds.”
The $860m project, which will generate 250 megawatts of electricity and put an end to load shedding, is the biggest project ever undertaken in Uganda.
The executer, Bujagali Energy Limited, is a consortium of American Sithe Global, Kenyan Industrial Promotion Services (IPS) and the Ugandan Government.
IPS is an affiliate of the Aga Khan Fund for Economic Development. The consortium put $190m into the project while the rest are loans, mainly from the World Bank Group, the European Investment Bank and the African Development Bank.
The project employs 2,500 people who work around the clock in three shifts. The facility consists of a power station, housing five 50 megawatt turbine generators. The structure is 52 metres high and stretches 30 metres under the ground. The site has its own quarries and cement mixers. “We mix cement with ice to prevent the cement from heating up and cracking,” said spokesperson John Chihi. The cement is procured from Bamburi in Kenya while the steel is shipped in from Turkey.
Of the total number of workers, 2,200 are Ugandans. They are employed as welders, carpenters, concrete finishers, equipment operators and truck drivers.
The majority of them were recruited locally. “We were fortunate to find enough skilled labour locally since another hydro-power project was built in Jinja five years ago,” said Gaydar.
All the workers are equipped with life-saving gear, such as helmets, boots, fluorescent vests and ropes. Only one minor accident has been reported since the project started in August 2007.
Once completed, the power plant will come as a relief to businesses and industries that have been struggling with continuous power cuts in the past years.
Bujagali, located eight kilometers north of the existing Nalubaale and Kiira power plants, will generate double the amount of electricity using the same water.
Reliable and affordable power will make Uganda’s manufacturing industry more competitive in the region, creating more jobs and contributing to economic and social development.
But even before the project is complete, the communities displaced on either side of the river have been transformed.
Four villages on the eastern bank and four on the western bank, 34 families in all, had to be resettled because of the project.
Some 200 youth in the new village of Naminya are being trained in vocational skills, while village health teams were set up to sensitise the communities on malaria, diarrhea, and HIV/AIDS.
“We organised a health and hygiene competition among the households and the winners got goats and mosquito nets,” said Chihi.
Jinja district health officials say water-borne diseases like cholera, bilharzia, diarrhea and typhoid had been a common occurrence in this once remote neighborhood.
Hadija Kezala, who lives within walking distance from the project, won a cow, a box of washing soap and three mosquito nets for maintaining the cleanest home.
Besides uplifting the community, the contractor is also running an environmental programme. They reforested 440 hectares of land and trained people how to set up tree nurseries.
As for tourism, the Bujagali Falls will disappear but the rafting will continue. The rafters only have to start their journey further down the river. The water on the western bank will be turned into a recreational lake. “We just have to move the tour operators to the other side of the dam,” said Gaydar.
The mighty structure rising out of the drained river bed has disproved the skeptics who thought a project like Bujagali was not possible in Uganda.
By Ismail Musa Ladu & Martin Luther Oketch (email the author)
Posted Tuesday, August 31 2010 at 00:00
On August 21, 2007 President Yoweri Museveni and the Aga Khan, Prince Karim al-Hussaini, the spiritual leader of the Ismaili Muslims, laid the foundation stone for the Bujagali hydropower dam on the River Nile in a show of commitment to address Uganda’s energy deficit.
The 250 MW project, co-financed by the World Bank Group, is a major component of Uganda’s answer to the electricity supply gap that in recent years has made rolling blackouts a daily reality for Uganda’s residents, businesses and services.
Many Ugandans have kept on pondering as to when the project will be ready. However, the green light seems to be flashing.
The Bujagali Hydro-power Project will produce its maiden 50 megawatts after the completion of the first phase between August and September next year, the Project Director of Bujagali Energy Limited told Business Power last week.
Mr Glenn Gaydar told Business Power that the project is on course but before the other phases are rolled out, the success of the first phase must be evident.
“Between August and September next year we will have the first phase (with 50 megawatts) complete,” Mr Gaydar said adding: “We will then test it and see how it goes and another one will follow.”
The $860m project, which will generate 250 megawatts of electricity and ultimately bring an end to the rampant load shedding, has so far been the country’s biggest project. This project is expected to be complete by 2012.
It is anticipated that once commissioned in 2012, the 250 megawatt, run-of-the-river hydropower plant on the Victoria Nile, will re-use water flowing from two existing upstream facilities to generate electricity.
The additional power will increase supply to the national grid at the lowest cost compared to other power generation expansion options under Uganda’s energy sector strategy.
Continued shortage of electricity threatens Uganda’s macroeconomic performance. Only five per cent of the population has access to electricity, making it one of the lowest per capita energy consumption rates in the world.
Hospitals, schools, businesses, and residences suffer load shedding caused by these shortages, which have stunted Uganda’s economic growth by an estimated one per cent of the country’s gross domestic product.
To alleviate the energy shortage, Uganda has had to rely on thermal power, a more expensive source of energy generation that, in part, caused a significant increase in the price of electricity by roughly 100 per cent in 2006.
To improve on power supply, Uganda devised a strategy aimed at promoting an efficient power sector, one that would offer an increased role to the private sector for future development, provide adequate, reliable and least-cost power generation capacity to meet the population’s demand and increase the percentage of rural households with direct access to electricity in an effort to help revitalise rural development.
The country passed and implemented a new Electricity Act and established the Electricity Regulatory Authority; unbundled the state-owned electricity company into generation, transmission, and distribution agencies; conceded generation and distribution facilities to the private sector; established a Rural Electrification Agency and approved the establishment of a credit facility to support energy investments in rural areas.
The expected outcome of the Bujgali power project will also result into increased supply of improved air quality and jobs for Ugandans (app. 2,000 jobs at the peak of construction).
The executer of the project - Bujagali Energy Limited - is a consortium of American Sithe Global, Kenyan Industrial Promotion Services (IPS) and the Uganda government. IPS is an affiliate of the Aga Khan Fund for Economic Development.
The consortium put $190 million into the project while the rest are loans, mainly from the World Bank Group, the European Investment Bank and the African Development Bank.
Uganda has an acute shortage of electricity, which is negatively affecting the nation's economy and the well-being of its citizens. The Bujagali Hydropower Project is a 250-megawatt power-generating facility proposed by Bujagali Energy Limited, a company jointly owned by affiliates of Sithe Global Power, LLC and the Aga Khan Fund for Economic Development (see About Us). The project will preserve the environment while producing substantial benefits for Uganda, including:
Increased electricity supply
Lower electricity costs
Improved air quality
Jobs for Ugandan workers
Improvements for villages located nearby
The Bujagali Hydropower Project will comply with strict environmental and other regulatory requirements. The project was approved by the Ugandan government, The World Bank Group and other potential lenders in April 2007, and is under construction.
An associated power transmission system, the Bujagali Interconnection Project, is a separate proposal sponsored by Uganda Electricity Transmission Company Limited that was also approved by the government and lenders (see Interconnection Project).
We have implemented an open, collaborative public consultation program to maximize community awareness and opportunities for public involvement. See Public Consultation for more information on our community outreach program.
See Project Overview for a summary of the Bujagali hydropower facility. More detailed information is included in the Key Project Documents section, which includes links to important documents filed with the Government of Uganda and prospective lenders.
As the final countdown to the completion of the Bujagali Hydropower Project gathers pace, engineers diverted the River Nile to flow in its original left channel and through the gated spillway which is part of the newly constructed powerhouse super structure.
The significant milestone, which paves way for the completion of the final civil structure for the 250MW power project, an earth dam connecting and the eastern bank of the river, was achieved earlier today when Salini and BEL engineers supervised the breaching of the upstream coffer dam that previously diverted the river entirely to the eastern channel to allow the powerhouse structure and central dam to be constructed.
The left channel had been dewatered since September 2007 to allow for the construction of the powerhouse, gated spillway and the west and central embankment dams. The powerhouse superstructure comprises of the powerhouse has five units each capable of producing 50MW, control room, gates and other mechanical plant, among other plant and equipment.
Speaking while on a recent tour of the project, Bujagali Energy Limited Board Chairman Mr. Nizar Juma marveled at the splendour of the Bujagali structures and indicated that the project sponsors were highly impressed by the progress of the project which was on schedule to allow Uganda and the region to start enjoying the benefits of adequate, reliable and affordable electricity.
“I would also like to commend the Government of Uganda and in particular the Ministry of Energy and Mineral for the support it has accorded the project”. This aptly demonstrates the potential to a country’s economic development that well managed private public partnerships can indeed contribute” he said, and further observed that upon commissioning of Bujagali the era of load-shedding would be consigned to history.
Works on eastern embankment, which will connect the central dam and the eastern bank of the river, are 30% complete and will be concluded by August 2011, thereby paving the way for the filling of the created reservoir and subsequently commissioning of the first unit generation of 50MW in October of this year. The full commissioning of the 250MW is scheduled for April 2012.
Mr. Bruce Wrobel Sithe Global’s President/CEO and a director of BEL was delighted that his company was proud to be part of a project that would transform the lives of millions of Ugandans by providing them affordable electricity that would allow them to exploit their potential to the fullest. “Bujagali will not only support industrial development but will also ensure that rural households have access to affordable electricity and many other services that depend on power”.
Noting that the project’s civil works are now 95% percent complete, the Project Director, Mr. Glenn Gaydar, indicated that focus has now shifted to installation, testing and commissioning of electro-mechanical equipment, with the inauguration of the first 50MW unit in October as the priority target.
He also appreciated UETCL and Eskom support that had facilitated the seamless achievement of today’s milestone, i.e. diversion of the river through the gates in the powerhouse structure.. Bujagali will provide much needed generation capacity to meet the Uganda’s electricity needs including, releasing suppressed demand in the system, cater for organic growth in power demand, replace expensive thermal generation and overcome on-going load-shedding.
Bujagali will therefore restore the competitiveness of the Uganda economy by creating jobs, reducing poverty and improving the quality of life. In so doing Bujagali will become an integral part of the country’s social and economic development.
About Bujagali Energy Limited (BEL)
BEL is a special purpose company, co-owned by the Industrial Promotion Services (K) (“IPS”), an affiliate of the Aga Khan Fund for Economic Development (“AKFED”), Sithe Global Power, LLC (“Sithe”) an affiliate of the Blackstone Group and the Government of Uganda.
BEL will own and operate the US$860m Bujagali Hydroelectric Power plant for the 30 year concession period before eventually transferring the plant to the Government of Uganda for US$1.00.
Lenders to the project comprise the IFC, a member of the World Bank Group, the African Development Bank (AfDB), the European Investment Bank (EIB), DEG & Germany’s development bank (KfW), Proparco & the development bank of France (AFD) and the Netherlands Development Finance Company (FMO).
Barclays/ABSA Capital and Standard Chartered Bank are providing commercial debt finance under IDA Partial Risk Guarantee while MIGA is providing insurance guarantee cover to the Sithe Global equity.
Uganda’s Bujagali Power Plant Starts Supply, Muloni Says
Fred OjamboFeb 02, 2012 4:00 am ET
(Adds power deficit in fourth paragraph.)
Feb. 2 (Bloomberg) -- Uganda’s 250-megawatt Bujagali hydropower project started supplying electricity to the national grid and may reach 50 megawatts later today, Energy Minister Irene Muloni said.
Supply to the grid in the East African nation will rise as the commissioning of all the plant’s capacity is expected in July, Muloni said by phone from the capital, Kampala.
“They started testing the plant last week and supply reached 37.5 megawatts this morning and may reach 50 megawatts by the end of the day,” she said.
Uganda, East Africa’s third-biggest economy, has regular nationwide outages amid a power deficit, with production at 375 megawatts and consumption at 450 megawatts by the end of last year, President Yoweri Museveni said on Dec. 31.
The country will end electricity subsidies, which have cost the nation 1.53 trillion shillings ($658 million) since 2005, when Bujagali reaches full capacity, Muloni said Jan. 12.
Uganda will use the savings to finance public infrastructure projects, including the construction of the 600 megawatt Karuma Hydropower Project, whose construction starts in May, she said at the time.
The plant is jointly owned by Sithe Global Power LLC and Industrial Promotion Services Kenya Ltd., an affiliate of the Aga Khan Fund for Economic Development SA through Bujagali Energy Ltd.
Construction of the five-turbine plant started in mid-2007 and was expected to cost $873 million, Bujagali Energy said in January 2008.
Bujagali Energy Successfully Delivering First 50MW Of Clean Energy to the Ugandan Electricity Grid
Project on Track for Full 250 MW Commissioning Later This Year
KAMPALA, Uganda, Mar 19, 2012 (BUSINESS WIRE) -- Bujagali Energy Limited (BEL), the owner and operator of the Bujagali Hydroelectric Power Plant (Bujagali) today confirmed that the first 50MW unit has been delivering power reliably to the national grid for transmission and distribution to the Ugandan public since 22 February 2012, and that the unit has since successfully completed the mandatory reliability test run.
Minister Kajara toasts with Mr Ahmed during the celebrations in Kampala on Thursday. Photo by Faiswal Kasirye
By Solomon Arinaitwe (email the author)
Posted Sunday, July 22 2012 at 01:00
The Aga Khan Development Network on Thursday celebrated 55 years of His Highness Prince Karim Aga Khan as head of the Ismailia Muslims.
The Aga Khan is the 49th hereditary Imam of the Ismailia after succeeding his grandfather Shah Aga Khan on July 11, 1957. The Imamat Day is marked every July 11 but different communities organise celebrations on different days.
Speaking at celebrations held at the Serena Hotel, Kampala, Mr Mahmoud Ahmed, the Aga Khan diplomatic representative, said the Aga Khan Development Network would engage more in social development of Uganda.
He, however, warned that failure to eliminate infrastructural deficits in power and transport was affecting investor confidence in Uganda.
He said the Aga Khan will grace the opening of the 250 MW Bujagali dam later this year, which is expected to solve the load shedding problem.
The Aga Khan Development Network runs a variety of upscale businesses in Uganda in health, education, culture and rural development sectors. The State Minister for Investment, Mr Aston Kajara, said the Aga Khan investments in Uganda were a testimony that doing business in Uganda is not risky.
He added that businesses that connect Uganda to her regional partners in Kenya, Tanzania and Rwanda were aiding the integration efforts of markets in the East African region.
The Minister said that the Aga Khan was investing in Uganda “at a time when we are very vulnerable”.
Monitor Publications Ltd and NTV under the Nation Media Group, are a subsidiary of the Aga Khan Development Network.
Sunday, 23 September 2012 21:29
Written by Edward Ssekika
As part of the activities to celebrate 50 years of independence, President Museveni and His Highness the Aga Khan are expected to officially inaugurate the just-completed Bujagali hydropower project.
According to Mahmood Ahmed, the Resident Representative of the Aga Khan Development Network, the 250 megawatt Bujagali hydropower project will be inaugurated on the eve of the country’s Golden Jubilee, on October 8. Bujagali hydropower project is the work of a public-private partnership (PPP) model between the government of Uganda and a consortium involving the Aga Khan Fund for Economic Development.
The consortium formed the Bujagali Energy Limited (BEL), which will own and operate the power plant for a 30-year concession. The plant will then become a government asset after being handed over for $1. Dr Kevin Kariuki, head of infrastructure in Aga Khan’s Industrial Promotion Services, says, the dam can generate even more electricity than the projected 250 megawatts.
“The dam can generate 270 megawatts,” Dr Kariuki told journalists at Kampala Serena hotel last Friday.
Dr Kariuki hailed the important role the Uganda government played in ensuring that the project is implemented on time. In May 2007, government extended a Shs 90m loan to the BEL to expedite the construction. The developers paid back the loan. In total, says Dr Kariuki, $860m has been spent on the project. Bukenya Matovu, the head of communication in the Energy and Mineral Development ministry, said the dam had doubled Uganda’s electricity supply. He added that the power plant currently meets 49% of the country’s energy requirements.
Uganda’s electricity demand has been growing at an annual rate of approximately 10% in recent years. This has led to demand exceeding supply, something that triggered frequent load-shedding. Now, with a significant increase in power generation and energy, the project has virtually eliminated load-shedding and replaced the entire emergency thermal generation, Matovu noted.
“This will spur economic growth and considerably improve the lives of Ugandans,” Ahmed added.
A statement from BEL says over 3,000 jobs were created at the peak of the construction. BEL is to sell the energy generated to the Uganda Electricity Transmission Company Limited at 10 US cents/kwh. The cost is expected to go down substantially after the expiry of the concession.
Bujagali’s completion and inauguration brings to an end one of Uganda’s most controversial public projects. Back in early 2000, the project hit headlines after the Sixth Parliament questioned government’s commitment towards protecting the environment. Little wonder, President Museveni has often blamed the Sixth Parliament for the delay in the construction of the dam.
However, it was not entirely their fault. As politicians debated and bribery allegations emerged, AES, an American energy company which was to lead the construction, pulled out in 2001 after experiencing some financial challenges at home. In 2006, Bujagali got new developers, the Aga Khan Fund for Economic Development, who formed BEL. Aga Khan’s Industrial Promotion Services together with Sithe Global Power embarked on the project.
Loans from the World Bank, European Investment Bank, Netherland’s FMO, African Development Bank and France’s PROPARCO, among others, bolstered the project. Also involved in the project was Industrial Promotion Services (Kenya) Limited and SG Bujagali Holdings Ltd, an affiliate of Sithe Global Power, LLC (USA).
Bujagali hydropower project, Dr Kariuki notes, has been approved as a Clean Development Mechanism (CDM) by the executive board of United Nations Framework Convention on Climate Change (UNFCCC). As a CDM project, it could earn about $17 million per year from selling certified emission reduction (CER) credits to industrialised countries as part of their emission reduction targets under the Kyoto Protocol of the UN framework Convention for climate change, he explained. Under the deal, the Uganda government would receive 60% of the carbon credit income while 40%l goes to BEL.
President of South Sudan Gen. Salva Kiir, his Highness the Agha Khan greeting the ministers Irene Muloni and Daudi Migereko at Bujjagali Dam.
President of South Sudan Gen. Salva Kiir, his Highness the Agha Khan greeting the ministers Irene Muloni and Daudi Migereko at Bujjagali Dam. It was during the commissioning of the Bujjagali Dam. Photo by Abubaker Lubowa
The 250MW Bujagali Hydropower Dam is about to be commissioned. High profile guests include Amama Mbabazi, Speaker Rebecca Kadaga, her deputy Jacob Oulanyah, Energy Minister Irene Muloni. They are waiting for President Yoweri Museveni and the Aga Khan to arrive for the commissioning of the $860 million project.
EAT17:15 However, the President says, Uganda’s could witness loadshedding within the next two years unless other electricity projects are initiated. He asks Bujagali Energy consortium to consider other projects. He also asks the Aga Khan to get him investors who will add value.
EAT17:20 The President formally commissions the project. “It’s now my pleasure to declare commissioned the Bujagali Hydro Power Project,” he says, while unveiling a plaque to symbolize the commissioning.
EAT 17:28 Some guests start leaving the venue as the National Anthem is played to mark the end of the event.
EAT 17:11 President Museveni says external funding is not reliable, and that with the energy fund, Uganda will not be at the whims of foreign funders.
He says he is “going to study the factors behind the delay of Karuma.” Museveni adds that with the country more peaceful and with more electricity, Uganda’s growth rate would head north.
EAT 17:01 Women in yellow gomesis ululate as President Museveni steps forward to make his speech. “Abantu bano mbafunyemu akasente,” the president says.
Museveni says that the Libya of Gadaffi had some electricity before he – Gadaffi – was killed by Western countries. He says there is no modern life without electricity, and that people who don’t develop electricity should be taken to the ICC because people die due to lack of electricity.
EAT 16:53 The Aga Khan starts giving his speech. He says this occasion is of great significance, and is an inspiring model on how such change can be achieved.
The Aga Khan acknowledges the community around the project, the scientists and engineers, as well as the government of President Museveni. He says Bujagali is a Ugandan success story. He says the project won’t stop delivering electricity but would continue to improve on the lives of the community.
EAT 16:48 The Minister of Energy, Irene Muloni, steps forward to invite the Aga Khan. She says “the commissioning is one of the best gifts we have received as a country.”
Ms Muloni says the ministry has won an award for promoting the Bujagali Project, and that the ministry would collect the award from the London Stock Exchange in December.
EAT 16:45 Claude Periou, the CEO of PROPARCO, says Bujagali is the kind of progress “we should all be proud of.” He says Bujagali will serve as a model in other countries. Mr Periou says time was needed to complete the project and the project learned is that partnerships are important.
EAT 16:41 David Foley, the CEO of Blackstone Energy Partners, says with the formal commissioning Uganda can enjoy independence with electricity. He says that without the Aga Khan Bujagali would not be what it is. Foley says families no longer have to worry about food going bad in their fridges.
EAT 16:31 He says this is the largest independent private project in Sub Saharan Africa. Nizar says he is glad to return to his country of birth, Uganda.
Nizar adds that President Museveni’s vision guided them to complete their project on schedule and on budget, whilst adhering to stringent environmental standards. He adds that 3000 people worked on the project, which consumed a total of $902 million.
EAT 16:27 The LCV chairman says the “mega investment” will boost development. He says they have a better housing estate and roads as a result of the project. Nizar Juma, the Chairman of Bujagali Energy Ltd, is now delivering his speech. He says he is now honored to welcome the guests.
EAT 16:20 St Peter’s Primary School now singing a congratulatory song. The pupils, in navy blue dresses and sky blue blouses extol the president and the Aga Khan. Eng. D’Ujanga walks to the front, perhaps to tell the pupils not to spend so much time on stage. He then asks the Buikwe District LCV Chairman to the front.
EAT 16:14 The Aga Khan is standing next to President Museveni, on his left. Bishop Kyomya of Busoga Diocese (CoU) walks to the front to deliver the opening prayer. He prays that the dam fosters Uganda’s development. Guests take their seats.
The Democratic Republic of Congo, Angola and Tanzania are all represented. Tanzania is represented by the country’s Vice President Mohamed Gharib Bilal .
EAT 16:10 President Museveni, flanked by the First Lady, arrives. They are given a standing ovation. South Sudan President Salva Kiir and Burundi leader Pierre Nkurunziza also arrive. The Uganda Police Band plays the National Anthem.
The 250MW Bujagali Hydropower Dam is about to be commissioned. High profile guests include Amama Mbabazi, Speaker Rebecca Kadaga, her deputy Jacob Oulanyah, Energy Minister Irene Muloni. They are waiting for President Yoweri Museveni and the Aga Khan to arrive for the commissioning of the $860 million project.
EAT 16:08 The Prime Minister, Amama Mbabazi, is peruses a copy of the Daily Monitor. Nation Media Group Wilfred Chairman Kiboro is here too.
EAT 15: 55 Master of ceremonies, Eng. Simon D’Ujanga takes stage. He says the president and the Aga Khan “arrived earlier” but have been touring the complex.
Interlude of jazz music plays to help guests. It’s hot inside the tent, and some guests are using booklets to fan themselves. Heavy army trucks are driving around the dam.
EAT 15:45 As they wait, it’s time to ponder about the next project elsewhere for Musa Kakaire, who was working as a “fitter” of mechanical parts at the dam. He says: “My services are no longer needed here now that the project is complete. I have begun looking for a job elsewhere.”
President Museveni and His Highness the Aga Khan are this morning expected to formally commission the $860 million (Shs2.1 trillion) Bujagali Hydro Power Project in Jinja.
“Construction has come to completion. The new chapter is exciting for us, we are thrilled...” Mr Bill Groth, the Bujagali Energy Ltd’s resident construction manager, said ahead of the commissioning, which should also be graced by at least 10 regional leaders here to attend the country’s jubilee celebrations.
Bujagali will substantially lower the cost of doing business since its electricity will be sold at a bulk price of $10 cents, which is $19 cents lower than power produced by Electro-maxx and Jacobsen thermal power plants. Electricity is a crucial overhead in industrial production.
Since its completion in June 2012, the government has decommissioned the Aggreko thermal power plants in Jinja and Mutundwe, which were each contributing 50MW to the national grid. This helped the government save the $9.5m (Shs23.3b) which it was spending monthly on electricity subsidies.
From 2005 to 2011, the government had spent Shs1.5 trillion on subsidies, which was not sustainable because it sucked up resources badly needed to fund other large hydropower projects, according to government sources.
At some point, the government had to request BEL, which is comprised of the Industrial Promotion Services (the infrastructure and industrial development arm of the Aga Khan Fund for Economic Development) and Sithe Global Power LLC (USA) to do a “unit-by-unit” commissioning to mitigate the electricity deficit.
BEL will re-use water discharged by the upstream 380 megawatt Kiira-Nalubale power plant.
There were concerns that Bujagali would draw more water from Lake Victoria.
The project was funded by the African Development Bank, ABSA Capital, Agence Francaise de Developpement, Barclays, DEG, European Investment Bank, Netherlands Development Finance Company, PROPARCO, Standard Chartered Bank, the World Bank Group and International Finance Corporation.
With Bujagali now on board, there has been a noticeable end to load-shedding in most parts of the country that are on the national electricity grid. Bujagali is contributing 49 per cent of all the electricity consumed in Uganda. But with the demand for electricity increasing by 10 per cent annually, Uganda will need another power plant to meet the growing demand within the next two years.
The completion of the project frees up 2,000 skilled employees, who will come in handy when the construction of Karuma Hydro Power Project commences next year.
Fifteen heads of state have confirmed they will be attending the golden Jubilee celebrations slated for Tuesday. Boni Yayi of Benin, Gambia’s Yahaya Jammech, Malawi’s Joyce Banda, Paul Kagame of Rwanda, South Sudan’s Salva Kiir, Tanzania’s Jakaya Kikwete and Pierre Nkurunziza of Burundi have confirmed attendance.
Others are Joseph Kabila of the Democratic Republic of Congo, Mwai Kibaki of Kenya, Denis Sassou Ngweso of Congo Brazaville, Mohamed Morsi of Egypt, Francoise Bozize of the Central African Republic, Namibia’s Hifikopunya Pohamba, Khama Ian Khama of Namibia as well as the recently elected Hassan Sheikh Mohamud of Somalia.
Bujagali project commissioning
The head of the Aga Khan Development Network, Prince Aga Khan, who has also confirmed attendance, is expected to lead the 15 heads of state and governments in the commissioning of the Bujagali hydro electricity plant which will be commissioned on Monday.
The 250MW project, which started in 2007, is billed as one of the most successful public-private-partnership projects to be commissioned and completed within schedule in Africa and is now regarded a global case study.
Queen Elizabeth of England, who handed over independence to Uganda, is represented by Prince Edward, the Duke of Kent, who jetted into the country on Thursday.
Ugandan President Museveni and Aga Khan Inaugurate Bujagali Hydropower Plant
BusinessWire · Oct. 8, 2012 | Last Updated: Oct. 8, 2012 1:52 PM ET
Uganda’s President, Yoweri Kaguta Museveni, today inaugurated the 250MW Bujagali Hydropower Plant in the presence of the Aga Khan and project partners Sithe Global, a company majority owned by a fund managed by Blackstone on behalf of its investors. The ceremony, which took place on the eve of celebrations marking 50 years of Uganda’s independence, was attended by government officials, heads of State from across Africa, international dignitaries and members of the diplomatic community.
The plant, constructed at a cost of approximately US$900 million, was jointly funded by Industrial Promotion Services (IPS), the infrastructure and industrial development arm of the Aga Khan Fund for Economic Development, Sithe Global Power LLC (USA), a company majority owned by Blackstone Capital Partners IV, L.P., a fund managed by Blackstone on behalf of its investors, and the Government of Uganda. It has eliminated Uganda’s previous energy shortage by nearly doubling the country’s effective generation capacity (it currently meets 49% of the country’s energy requirements) and provides clean, reliable power at lower costs than existing power generating facilities. Construction of the plant commenced in August 2007. It comprises five units of 50MW each, commissioned in phases between February 2012 and June 2012.
Bujagali represents one of the largest privately-funded power sector investments ever made in Sub-Saharan Africa and sets a unique precedent for public-private partnerships. The plant will be operated by Bujagali Energy Limited (BEL), a company established by the project partners to operate and manage the plant, for a 30 year period, following which it will be transferred to the government of Uganda for a nominal price of US one dollar.
Uganda’s electricity demand has been growing by 10% every year, while supply prior to the commissioning of Bujagali has remained stagnant. Frequent power shortages and blackouts accounted for between 1 to 1.5% loss to Uganda’s GDP, thereby slowing the country’s economic development. Since the first unit became operational in February 2012, Bujagali has provided a reliable solution to Uganda’s power demands, serving as a catalyst for economic growth and replacing emergency thermal generation costs, thereby saving US$ 9.5 million per month in government subsidies.
Commenting on the role of the Aga Khan Development Network, His Highness the Aga Khan, said, “But let me emphasize that this has also been a global story. As we try to count up the key participants, we find that they come from at least 37 different countries - a truly international network of partners. Those of us who represent the Aga Khan Development Network are proud to have been associated with so many fine allies in this work, including our close, central partnership with Sithe Global and Blackstone.”
The project serves as an example of a highly successful public-private partnership model, ideal for replication throughout the region.
Speaking at the event, David Foley, Senior Managing Director and Chief Executive Officer of Blackstone Energy Partners, said, “Bujagali showcases how successful partnerships between the public and private sectors can create development opportunities for growing economies. Blackstone is proud to have played an important role, together with our partner the Aga Khan, in the development of Bujagali, the successful completion of which is a credit to the leadership of President Museveni and the commitment of the Government of Uganda. Africa is a resource rich continent and is primed for the development of hydroelectric power generation facilities like Bujagali. On behalf of our investors, Blackstone has committed billions of dollars of equity capital to build energy businesses on four continents around the globe and will continue to invest in emerging market countries to provide them with the affordable, safe and reliable energy to sustain their economic growth.”
The Bujagali Hydropower Project has already impacted the surrounding communities with the creation of approximately 3,000 new jobs for Ugandan workers during peak construction; improved community services such as clean water supply, education and health facilities in nearby villages; the provision of micro-credit funds to surrounding rural populations and the enhancement of infrastructure.
“That a project of Bujagali’s size and complexity has been completed on time and within budget whilst adhering to the highest technical as well as social and environmental standards is a huge testimony to the quality and experience of the sponsor, development and construction teams, with whom I am truly proud to be associated. The Bujagali experience is invaluable and we will certainly draw from it when developing future projects in the region,” observed Mr. Nizar Juma, the Chairman of Bujagali Energy Ltd.
Bruce J. Wrobel, Chairman and Chief Executive Officer, Sithe Global who was also present at the commissioning said, “We believe that projects like Bujagali, which has both impacted the energy sector in Uganda in a far-reaching positive way and mitigated the ecological footprint of a generation, is the key to sustainable development. We are proud to have joined our partners, the lenders and the Government of Uganda in bringing this project to a reality and it is gratifying to see the impacts the project is already having, not only by making available ample, clean, renewable energy, but also by having a positive effect on the lives of the people living in the community and region around this project.”
The Project has also been registered as a Clean Development Mechanism (CDM), making it the largest project ever registered in a Least Developed Country. Bujagali will yield an average of 900,000 Carbon Dioxide Emission Reductions (CERs) annually, putting it at the forefront of clean energy efforts.
The project was also made possible by support from a number of other lenders: International Finance Corporation (“IFC”), the European Investment Bank, African Development Bank (“AfDB”), Nederlandse Financierings-Maatschappij voor Ontwikkelinsslanden N.V. (“FMO”), Societe de Promotion et de Participation pour la Cooperation Economique (“Proparco”)/Agence Francaise de Development (“AFD”), DEG-Deutsche Investitions-und Entwicklungsgesellschaft MBH (“DEG”) and KfW. Barclays/ABSA Capital and Standard Chartered Bank are providing commercial debt under an International Development Association (“IDA”) Partial Risk Guarantee, while MIGA is providing insurance guarantee cover for Sithe Global’s equity.
BUJAGALI HYDROPOWER PLANT
Bujagali Hydropower Project was established through a public-private partnership model between the Government of Uganda on the one hand and a consortium of the Aga Khan Fund for Economic Development and Blackstone affiliates on the other.
This consortium partnered with the Government of Uganda to form Bujagali Energy Limited (BEL). BEL will own and operate Bujagali Hydropower plant for a 30-year concession period before transferring the plant to the Government of Uganda for US$1.
AKFED is an international development agency of the Aga Khan Development Network, dedicated to promoting entrepreneurship and building economically sound enterprises in the developing world. AKFED focuses on building enterprises in parts of the world that lack sufficient foreign direct investment. It also makes bold but calculated investments in situations that are fragile and complex.
Industrial Promotion Services (IPS)
IPS is the infrastructure and industrial development arm of AKFED. It has operations in Kenya, Uganda, Tanzania and DR Congo which employ some 8,500 people, and is also actively pursuing investment opportunities in Rwanda, Mozambique and Madagascar. Outside the East and Central Africa region, IPS also operates in Cote d’Ivoire, Burkina Faso, Mali, Senegal, Tajikistan, Afghanistan, Kyrgyzstan, Pakistan and Canada.
IPS’s involvement in power includes the 288 MW Azito gas power plant in Cote D’Ivoire, concessionaire for Energie du Mali (power & water utility), Kenya’s 75 MW Tsavo diesel plant and a vertically-integrated off-grid utility involved in generation, distribution and sale of electricity in the West Nile region of Uganda.
IPS is also a partner in the $650 million SEACOM submarine fibre optic cable which became operational in July 2009. The cable links countries in Eastern and Southern Africa to international cables in South Africa, India and Europe. In doing so, the cable provides access to affordable and high quality bandwidth to the Eastern and Southern Africa seaboard, which was previously the only part of the world without access to international submarine cables.
The Aga Khan Development Network (AKDN)
The agencies of the AKDN are private, international, non-denominational development organisations. They work to improve the welfare and prospects of people in the developing world, particularly in Asia and Africa. While each agency pursues its own mandate, all of them work together within the overarching framework of the Network so that their different pursuits interact and reinforce one another. The AKDN works in 30 countries around the world and employs approximately 80,000 people. The AKDN’s annual budget for non-profit development activities is approximately US$ 625 million. The project companies of AKFED generate revenues of approximately US$ 2.3 billion annually. All surpluses are reinvested in further development activities.
Blackstone (NYSE: BX) is one of the world’s leading investment and advisory firms and is an experienced and active investor in the energy and natural resources sector. Funds managed by Blackstone have invested/committed approximately $6 billion in the sector to date across four continents. The firm seeks to create positive economic impact and long-term value for its investors, the companies it invests in, the companies it advises and the broader global economy. Blackstone’s alternative asset management businesses include the management of private equity funds, real estate funds, hedge fund solutions, credit-oriented funds and closed-end mutual funds. Blackstone also provides various financial advisory services, including financial and strategic advisory, restructuring and reorganization advisory and fund placement services.
Sithe Global Power, LLC (Sithe Global) is 99% owned by funds managed by Blackstone. Blackstone purchased an 80% ownership interest in Sithe Global in 2005 and subsequently increased it to 99% in 2011 with the objective of facilitating Sithe Global's plans to develop, finance, construct and operate electric power generation facilities in the U.S. and certain other international markets. Sithe Global has a portfolio of power projects in various stages of development and construction in the Philippines, India, Africa, Europe, the Middle East and other regions totaling approximately 5,000 MW of generating capacity. Sithe Global also continues to pursue other opportunities within Africa.
Sithe Global is led by a seasoned management and technical team with extensive independent power project development experience, and a proven record of identifying project development and acquisition opportunities which create substantial value for its investors. The Sithe Global management team has successfully developed over 50 power projects in nine countries with a capital investment in excess of $5 billion.
For decades, we were in the dark. Whether you had paid your bills or not, electricity in our houses was hardly on.
So the completion of Bujagali power project was a Godsend. In an era where we are using everything with power - cooking, washing, hairdressing - the demand keeps growing. Bujagali contributes 250 Mega Watts (MW) to the national grid.
Until late July this year, power demand during peak hours (7:00pm - midnight), was at 443MW, yet available electricity was about 330MW, which ensured the economy continued to suffer from power blackouts.
Electricity supply has now increased to 580MW, thanks to the timely completion of the Bujagali hydropower project. Dr. Benon Mutambi, the Electricity Regulatory Authority chief, says power demand is growing at 10% per annum.
"It means that every year we should be able to commission a 50MW project online if we are to avoid going back to the situation we were in a few months ago," Mutambi said.
Karuma, which has stalled for some time, is expected to be completed in a few years. But Uganda is an endowed country and experts see no reason why we should not tap renewable options like solar, wind power and biomass.
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