Building Bujagali
Energy

Just a few kilometres from the source of the Nile River, engineers for Italian-based Salini Costruttori are busy overseeing the construction of spillways for Uganda’s much-anticipated Bujagali dam project. The spillways will control flooding on either side of the river, and when they are finished early next year, work will begin in earnest on Bujagali, thus ending nearly a decade of stalled plans for the dam’s construction.

“We have been trying to develop Bujagali hydropower resources for quite some time,” says Minister of Energy and Mineral Development Daudi Migereko. “In the late 1990s, there was a lot of discussion regarding the development of the project, and in 2001, the World Bank approved it. Unfortunately, there were problems with the global energy sector at that time. The companies involved ran into financial problems, and the project came to a standstill.”

Now the $500 million dam, the single largest investment East Africa has ever seen, has new financiers: Aga Khan Development Network, which sponsors projects worldwide in fields ranging from education to rural development and institution building, and Sithe Global of America’s Blackstone Group.

The Italian firm they have chosen to build the dam is the same company behind the two Gilgel Gibe dams in Ethiopia, which transformed that country’s energy sector. Prior to their construction, Ethiopia was able to supply electricity to less than 20 per cent of its population. Today, it is a net exporter of what has come to be known as the country’s ‘white gold’ - hydroelectric power.

Uganda needs the electricity that Bujagali will supply. Only three per cent of Ugandans currently have access, and only half of these get their electricity from the national grid, using instead homegrown solutions such as solar panels, car batteries or household generators. The country’s electricity shortfall has cost it two per cent in growth, and has been a deterrent to foreign investment.
Bujagali will supply an additional 250 MW of electricity, covering the current 100 MW shortfall. But this is only the beginning. The government has recently announced a sector strategy that aims to increase Uganda’s capacity to 22,500 MW by 2020.

This may seem a stretch considering that nearly 98 per cent of its current supply is generated at another dam down the river, the 380 MW Owen Falls, but only a fraction of Uganda’s hydroelectric potential has been developed, and oil and gas have recently been discovered in the country.

Consequently, the government is considering a number of projects. “If anybody wants to invest in this country, and wants to invest in the energy sector, this is the time,” declares Mr Migerekohe. “There will be no better time than now. The demand for power is there, and the support from the government is there. This is really the time to invest.”