THE cost of the proposed 250MW Bujagali hydro-power plant has risen to $750m (sh1,320b) from $500m (sh880b), a World Bank study has revealed.
An energy expert explained that the increment was due to the rising construction costs due to the high oil, metal and cement prices on the world market.
“The project’s costs including construction, capitalised financing costs, contingencies and other related costs for the dam and power house have been estimated to be $750m,” stated the Project Information Document of the Concept Stage.
It said the World Bank would support the project by providing a Partial Risk Guarantee of $115m (sh202.4b).
However, the interconnection project, which includes transmission lines, will be financed by the African Development Bank.
Tentative financing of the project will include $150m (sh264b) from shareholders, $480m (sh844b) in long-term debt, while the International Development Agency will provide $115m.
The IPS consortium had estimated $500m in the engineering, procurement and construction contract for the dam and power plant in June last year.
Bujagali Energy will build the plant and construct 100km of transmission lines, sub-stations and other works on behalf of Uganda Electricity Transmission Company.
Power tariffs are expected to drop once the Bujagali project is commissioned in early 2011.
Uganda’s power generation capacity is 480MW, but 220MW are generated from Kiira and Nalubaale power stations. That has created a 120MW shortfall.
