Powerless in Uganda
By BARBARA AMONG, The East African, 10/12/07
Dec 10, 2007 - 1:41:30 PM
multinational hydropower developer and operator, Statkraft Norfund Power Invest
AS (SN Power), is pulling out of four mini-hydropower dam projects in western
Uganda. Though the pullout is on the grounds of the project’s financial
viability, SN Power is selling its license to another Norwegian power firm.
Power announced in December 2004 that it would make Uganda its entry point for
Africa in the energy sector. The government had hoped its entry would help
improve Uganda’s ailing energy sector, when it began generation of 43.5
Megawatts of power in six districts in western Uganda.
company said it decided to withdraw from the projects in August this year,
because they were deemed financially unviable. “SN Power gave up the
Muzizi and Nengo Bridge licence rights, because we realised the projects would
be not be commercially viable,” said Marte Lerberg Kopstad SN Power’s external
Waki and Bugoye projects were developed to the point of investment decision,
but SN Power decided not to go further, as they did not fit our corporate
strategy and the commercial viability was not strong enough.”
The East African that SN power had decided to sell its
rights to Norwegian power company Troenderenergi. This will now mean that
residents of western Uganda will have to put up with irregular or no power
supplies longer than the 24-month construction period
Tronderenergi is based in Trondheim.
operates hydroelectric power plants and wind-farms as well as power grid in
parts of Norway. The company is entirely owned by 20 municipalities in
Norway, though registered as a limited company.
generated from these sites was expected to supply the western districts of
Bundibugyo and Kanungu, which have no power, and Kisoro, which gets its power
from Rwanda. The other three districts are Masindi, Kabarole and
Rukungiri, which are partly connected to the national grid, but do not have
adequate power supply.
Commissioner Paul Mubiru however, said the pullout does not spell doom for the
western districts, as Troenderenergi is already preparing to continue with
construction work at these sites. The relatively small hydropower
stations are expected to cost between $50 million and $60 million.
Norwegian government, with some 100 years of experience in developing
hydropower, owns SN Power. The company, licensed in November 2004 by the
Electricity Regulatory Authority (ERA), was expected to demonstrate its
expertise on four sites in western Uganda.
sites are Muzizi in Kabarole, with a 20MW capacity; Bugoye in Kasese with 11MW
capacity; Nengo Bridge in Rukungiri with a capacity of 7.5MW; and Waki in
Masindi, a 5 MW plant.
Power first gave up the licences for Muzizi and Nengo Bridge in early
2006. According to Mr Kopstad, SN Power made an agreement with
Tronderenergi whereby the latter took over all the work that SN Power had done
on Bugoye. The final agreement was signed in July this year.
is said to have completed the generation licence application, based on the
negotiations SN Power had started. “SN Power informed the
government that we did not want to renew the exclusivity rights for Muzizi and
Nengo Bridge in spring 2006. The licence for Waki was given up in the fall of
2006, when it became apparent that the project was not commercially viable
based on the NPC bids received in late 2006,” said Kopstad.
an abundance of the natural resources necessary for power generation, including
about 10 hydropower potential sites along the Nile alone, Uganda cannot meet
its domestic energy needs. As a result, load shedding is the order of the
day. The country’s power demand is growing at a rate of 9 per cent
annually, against a zero percentage growth in supply, leaving a supply gap of
five per cent of Uganda’s population has access to electricity, and the 250MW
Bujagali hydropower project under construction and eight other mini-hydropower
projects are expected to expand production to another 15 per cent of the
population - and attract more industries, to a country where domestic usage
accounts for 70 per cent of power consumption.
water levels in Lake Victoria and increasing demand have pushed Uganda into a
power crisis. In the face of this crisis, the government last year came
up with measures, such as the Energy for Rural Transformation (ERT) project, to
mitigate the power shortage. The four projects that SN Power was to develop and
operate are part of the ERT initiative.
Source: Ocnus.net 2007