OREANDA-NEWS. October 26, 2012. Uagandas president Yoweri Museveni, his First Lady Janet Museveni and Karim Aga Khan IV. surrounded by employees of the hydropower plant in Bujagali. Source: Aga Khan Development Foundation / Gary Otte

"The new power plant ensures for the first time a stable, reliable and sufficient supply of electricity," emphasised Yoweri Museveni, the long-standing Ugandan President, in his speech. "In this way it makes a key contribution to greater prosperity and development." Nearly all the heads of government of the neighbouring countries came to the festive inauguration of the first privately-operated hydropower plant in Sub-Saharan Africa. They also celebrated 50 years of Ugandan independence. The hydropower plant has model character. It not only puts an end to the massive bottlenecks in the electricity supply of the African country, thereby contributing to economic growth, but also simultaneously makes important progress in protecting the environment.

The hydropower plant in Bujagali was realised in partnership between the Ugandan government and private investors. KfW Entwicklungsbank and DEG contributed 45 million US dollars to the financing. Another important sponsor is the Aga Khan Foundation. "Bujagali is not only a Ugandan but also a global project. People from 37 nations have contributed to help make this innovative idea a reality," praised Aga Khan, who participated personally in the inauguration ceremony.

Disastrous Energy Shortage

Up to now Uganda suffered under an ongoing energy shortage. Every day power was cut for up to 12 hours. Enterprises had to repeatedly cope with production losses because machines suddenly stopped, while lights went out in hospitals during emergency operations at night.

Until now the government was forced to meet electricity needs in a makeshift manner by using expensive and environmentally harmful emergency generators. The generators, which run on diesel and heavy oil, produced 40 per cent of the electricity thus far. The high costs could only be met through massive government subsidies. Nevertheless the electricity tariff is extremely high. In Uganda a kilowatt hour costs 15 euro-cents and thus almost as much as in Germany, but with an annual per capita average income of 340 US dollar. As a result few inhabitants can afford the electricity. Merely twelve per cent of Ugandan households have an electricity connection at all, meaning only a small, relatively wealthy elite benefit from the subsidies in the electricity sector.

Energy Transformation Thanks to Hydropower

The new hydropower plant in Bujagali should change this precarious situation. The plant expands the country's electricity capacity by more than 50 per cent so that electricity demand in Uganda can be met in the coming years. The conversion to hydropower also reduces the annual emissions of carbon dioxide by 1.5 tonnes.

The launch of the hydropower plant ushers in an energy transformation in Uganda: "Providing affordable, green electricity is an important contribution to solving the current energy crisis in Uganda and leads to a significant increase in electricity generation thanks to climate-friendly hydropower," praised Norbert Kloppenburg, member of the Executive Board of KfW Bankengruppe, at the time.

But Bujagali will not only protect the environment in the future, as social and environmental measures were already included during the hydropower plant's planning and construction so as to design this large project in a socially and environmentally compatible manner. To compensate for lost pasture land and wildlife preserves, a large conservation area will be created south of the dam. In addition a total 85 households numbering 630 people had to be moved. According to newspaper reports the inhabitants are nevertheless pleased with the waterworks as they received financial compensation for the move. With this money they can now finance their children's education or increase the size of their livestock.