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Bujagali financiers release $682m

By Vision Reporter

Added 24th December 2007 03:00 AM

THE Government has received $75m it had advanced to the Bujagali hydro power contractors to kick-start the project. This follows the release of $682m by the 250 mega watts project’s financiers last week.

THE Government has received $75m it had advanced to the Bujagali hydro power contractors to kick-start the project. This follows the release of $682m by the 250 mega watts project’s financiers last week.

By Ibrahim Kasita

THE Government has received $75m it had advanced to the Bujagali hydro power contractors to kick-start the project.

This follows the release of $682m by the 250 mega watts project’s financiers last week.

The $75m loan was used to finance engineering design, detailed site investigations, construction of permanent civil works, camp site and offices and the procurement of equipment, which put the construction two months ahead of schedule.

The Bujagali Energy Ltd (BEL), a consortium between Industrial Promotion Services (IPS-Kenya) and the US Sithe Global, are the project developers, while the Italian firm, Salini, is the contractor.
Daudi Migereko, the energy minister, hailed the project’s financial close as a major break-through.

“This is a great tribute to public-private partnership and a just reward for sacrifices that the Government has made on behalf of the people of Uganda,” he said.

“The Government has created an environment that has enabled blue-chip lenders and BEL to commit financing for the project, while at the same time safeguarding the interests of Ugandans through equity ownership in the project as a result of its contribution of certain valuable assets, such as land and intellectual property, which had been previously developed.”

The minister, who led the negotiation team to London, said the money refunded would be returned to the Energy Fund for appropriate utilisation.

“The money has been wired back to Bank of Uganda.

“A full notice to proceed was signed, meaning that the project construction will progress in full blast without any further hindrance as the money has been availed.

“Interest rates and contract terms for the project were locked in, allowing the developer’s notice to proceed to take effect.”

Bujagali’s project major lenders include the International Finance Corporation, the World Bank’s private sector lending arm, the African Development Bank and the European Investment Bank.

The electricity demand growth has outstripped the capacity of existing hydro power generation on Nile River, causing severe disruptions to economic growth.

The Bujagali project is expected to provide substantial additional hydro power generation capacity, producing power at a leveraged cost of approximately $6.5 cents versus the current $31 cents cost of diesel generation units.

Bujagali financiers release $682m

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