February 2, 2012 / 9:59 AM / 8 years ago

Uganda adds 50MW from Bujagali dam to tackle power cuts

* Power outages sparked riots last year

* Evaluation of final bidders for Karuma dam underway

By Elias Biryabarema

KAMPALA, Feb 2 (Reuters) - Uganda on Thursday added 50 megawatts to its grid, after the first of five turbines at its Bujagali hydropower dam on the Nile river was switched on, potentially reducing power cuts that triggered strikes in the east African country last year.

Although it aims to be a top-50 crude oil producer, Uganda suffers a chronic power supply crisis which has long distressed businesses, slowed economic growth and stymied development.

Last year, 24-hour long power outages stoked public anger, igniting a series of riots across the country.

Energy minister Irene Muloni, told Reuters on Thursday the 250 megawatt hydropower dam would be brought online in installments, with the last turbine expected to start by July.

“The country has waited for the completion of this dam for a long time,” she said.

“The 50MW we’re adding to the grid today will slightly reduce the existing supply gap but we have to wait for completion of the entire project for the full impact to be felt,” Muloni said.

One of the largest energy infrastructure projects in east Africa, the dam was constructed on the famous Bujagali falls on the Nile and is expected to cost $860 million, excluding a $43 million contingency fund.

Uganda’s electricity supply deficit currently stands at about 130MW at peak demand, according to the sector regulator, Electricity Regulatory Authority (ERA).

Analysts say the Bujagali dam will only eliminate the frequent power outages temporarily with fast-growing demand expected to outstrip supply again in the next few years.

Muloni also said the ministry was evaluating the final bidders for the Karuma hydropower project but did not say when construction would begin.

The dam, to be developed on Karuma falls on the Nile, is expected to cost about $2.2 billion and generate 700 megawatts. (Editing by Yara Bayoumy and Keiron Henderson)

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