Bujagali Hydropower Project

Power tariffs will remain high despite the anticipated commissioning of Bujagali Hydro Electricity Dam in July, State Minister for Energy Simon D’Ujanga said yesterday.

Appearing before the Parliamentary Government Assurances Committee, the minister said Ugandans will continue paying the new power tariffs announced last month for the next 13 years to cover debts for the construction of the dam.

Whereas Mr D’Ujanga insisted that load-shedding would be no more, he said power tariffs will remain high until the government clears Bujagali Energy Limited (BEL), a company that is in charge of the Bujagali project and a loan which is in excess of $600 million payable in 13 years.

“We will expect cheap power when we move away from thermal power and clear the loan repayment which will continue for 13 years,” Mr D’Ujanga said.

When asked why such a cost is transferred to the end user, the minister said Uganda must compete with other countries that pay for electricity tariffs without being subsidised by government.

The minister said BEL will own the dam for 30 years before government takes over as MPs insisted that the power generated from Bujagali should replace what the government has been paying as subsidy.

“After 30 years, you will almost get power for nothing,” Mr D’Ujanga said.

The Electricity Regulatory Authority (ERA) last month increased consumer tariffs by 36 per cent and commercial dues by 69.7 per cent.

MPs blocked the new tariffs but ERA officials later insisted they will not suspend the new rates until they have consulted with the Ministry of Energy.

President Museveni, however, backed the 36 per cent increase in tariffs, saying the Shs1.5 trillion costs of subsidising power were unbearable.

The minister said the actual cost of electricity generated using petroleum for domestic users was Shs800 per unit where the government would pay a subsidy of Shs 415 and the customers would pay Shs385 per unit.

Subsidy shoots up
“But the subsidy since 2005 rose to Shs1.5 trillion hence the increment since government had to reduce on the subsidy to Shs276 and that of the customers increased to Shs524,” he said.

The committee chairperson, Mr Odonga Otto, said since the tariffs had been increased, power generated by Bujagali should replace the government subsidy so that the end users do not feel the pinch.

President Museveni is on record as having promised that the cost of electricity will reduce with the commissioning of the 250MW Bujagali project but this will not be the case.
The minister also said the commissioning of Karuma Dam in five years will generate more electricity.

By Mercy Nalugo, Daily Monitor

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