By Ibrahim Kasita

THE African Development Bank on Wednesday approved $110m for the 250MW Bujagali hydropower project, paving way for construction this month.

The Government and the project developers have signed the agreement for engineering, procurement and construction (EPC).

The $799m project’s main component includes the powerhouse plant and the dam EPC costs.

Fred Kabagambe-Kaliisa, the permanent secretary in the energy ministry, yesterday confirmed the approval of the funds.

“The bank has approved borrowing for the financing of the main cost component which includes the Dam and the Powerhouse plant. However the funds for the transmission line are expected to be approved on May 9, after final negotiations.”

The bank is also expected to finance the 100km transmission line that will transport electricity generated in Jinja to Kawanda sub-station near Kampala at a cost of $62m.

The transmission line includes the resettlement and subsurface risk will be handled by the Uganda Transmission Company.

The development follows earlier approval of $360m in loans and guarantees by the World Bank for the Bujagali hydropower project.

Bujagali Energy Ltd is the project developers, while Salini, an Italian firm, are the constructors.

Project lenders include the World Bank Group, the European Investment Bank and the African Development Bank.