President of Norwegian firm Sithe Global that recently acquired the Bujagali hydropower dam in Uganda, Brian Kubeck, affirmed that cost of power will not drop as a result of the takeover. The Norwegian firm purchased the infrastructure from Bujagali Energy LDT.

“This is just a change in ownership and may not impact on the cost of Bujagali power…Government has where it wants power costs to be, but investors also look at the costs incurred,” Kubeck said.

The dam, which has a capacity of 250 MW, provides half of the power consumed in Uganda. Its output is sold to government at US$10.1 cents per kilowatt hour, relatively high compared to two cents of governmental plants, and should reach 16 cents, by 2022. As a result, cost of energy in the country increased significantly.

To improve the situation, the government started building the Karuma and Isimba dams that have a total capacity of 788 MW. Their output will help reduce average sale price of power in Uganda.

The country presently produces 685 MW and consumes 550 MW for 18.5% coverage. At the source of this paradox, among other things, is limited transport and power distribution networks, but also high power tariff which is a major break to private foreign investment.

Gwladys Johnson