The commissioning of the sh6.3 trillion 600 MW Karuma Hydro Power Project is going to lower the cost of electricity, which will impact lowering the cost of producing goods and services in Uganda.
President Yoweri Museveni yesterday commissioned the project that will bring the total power generation capacity in Uganda to 2,200 MW from 380 MW in 2005. The function took place at Mutunda sub-county in Kiryandongo District. Museveni said research has to be made on the meaning of the name Karuma and the original name.
“Karuma project is generated much cheaper at $4.9 cents as compared to the one from Bujagali Hydro Power Project generated at $14 cents; it will support the factories, and soon it will not be enough,” Museveni noted.
Museveni said the modern economy of Uganda will have four sectors.
They include commercial agriculture with calculation and irrigation, manufacturing by factories, services by hotels, entertainment, transport, and ICT. He noted that peace and security are a necessary condition with low transport costs for businesses to succeed.
He said the railway is the cheapest mode of transport that includes repairing the old meter gauge railway lines and building the new standard gauge railway. He observed that water transport is another cheap mode of transport. He said road transport is not the best for cargo transport, although it has been used due to a weak economic base.
“If you come from underground, you don’t say the sun is not enough. The tarmac roads are costly; we are going to build oil pipelines to transport fuel.
Petrol tankers should be off the roads. Only passenger vehicles that are not heavy should be on the roads,” Museveni explained. Museveni emphasized the importance of lowering the cost of electricity and low interest to ensure a cheap cost of production.
The president promised to crash money lenders who are increasingly cheating people of their properties used as collateral. “How do you make an agreement that somebody has bought your property because he has lent you money? We are going to deal with money lenders,” Museveni said.
Museveni said that commercial banks can lend money to people setting up nightclubs and those importing wigs and perfumes.
On the marketing of goods, he said the integration of the African market will help provide big markets for goods and services.
The president said it is not wise to ban goods coming from a neighboring country because there can be reciprocal bans.
Museveni said the amount of electricity consumed by Europe and the USA is large, standing at 12,000 kWh to 15,000 kWh, while Uganda consumes only 218 kWh. Africa’s average consumption stands at 518 kWh, while Chad and Benin consume low amounts of about 100 kWh.
Museveni said Uganda’s target to produce and consume electricity should be raised. “The target should be to produce enough electricity for a modern person in our circumstances,” Museveni directed.
Joseph Oryem, the chairperson of LC1 Karuma Cell Central Ward, Karuma Town Council, said that Ugandans will benefit from the power project.
Oryem said it was a divine setting that the River Nile passes through Kiryandongo District, where the project is built. He thanked the contractor, Sinohydro Power Corporation, for the successful completion of the project that will generate economic and social development in Uganda.
He said Karuma Town Council is a young town council that needs power, better streets, and roads. He asked for the completion of compensation and resettlement of the remaining project-affected persons.
Edith Aliguma, the LCV Chairperson Kiryandongo, said the completion of the project is a landmark achievement that will transform Uganda.
Aliguma added that Kiryandongo District has witnessed a change, with better houses and better power supply within and in the surrounding districts.
“Rural electrification coverage in Kiryandongo, Nwoya, and Oyam districts is below 40%, affecting schools, technical schools, health centers, and cottage industries,” Aliguma said. She said 125 people have not been compensated in Kiryandongo District, while 119 people in Nwoya District have not been resettled. She added that some projects, like health centers and roads, have not been built.
Eng. Badru Kiggundu, the chairperson of the Karuma and Isimba Projects Steering Committee, said there has been a long wait for 11 years to complete the project. Kiggundu noted that this project is big in Africa, and Angola and Ethiopia have larger projects. Kiggundu said the steering team made 80 visits to the project sites and held over 800 meetings to supervise the project. He said all the challenges facing the project construction were addressed.
Kiggundu said that some land compensation cases have been delayed in courts of law. He said that the challenge of floating islands is a threat to the project and bridges across the River Nile.
Eng. Irene Bateebe, the permanent secretary at the ministry of energy and mineral development, said that by 2040 they are targeting the generation of 52,000 MW using renewable and nuclear energy.
“We shall enhance transmission and distribution to the last mile user, locally and nationwide. We seek to make one million connections to mining sites, SMEs, and parish development model projects; over 10,000 workers got employed at peak,” Bateebe explained.
Bateebe noted that the project sits on 4.65 square kilometers of land and 90% of the compensation and resettlement has been done with additional funding needed for completion of compensation.
Experts said that Ugandans have used the power for ironing, cooking, lighting, and powering machines following successful technical tests that were done over the last two years.
The Uganda Electricity Generation Company is the government agency that has been overseeing the construction and subsequent operations and management of the project. China’s Ambassador to Uganda, Amb. Zhang Lizhong, said they have worked closely with different stakeholders in solving questions about the project.
“This is a success for Uganda. Electricity matters everywhere. Hydropower is globally recognised as a clean source of energy; green is gold. Karuma will connect millions of consumers and promote green economic transformation. It makes Uganda an electricity hub and place for economic development,” Lizhong said. Lizhong said that the bilateral cooperation between Uganda and China has brought tangible results, as can be seen by the project.
Karuma Hydro Power is funded 85% by the EXIM Bank of China and 15% by the government. Lizhong called on Ugandans to export more dried chillies and aquatic products to China.
Ruth Nankabirwa, the minister for energy and minerals, said they will continue lighting the population. Nankabirwa noted that without power there cannot be social or economic development.
Nankabirwa said that the Karuma project was mooted in 1999 with the contract signing for construction taking place in 2013. Completion was marked for 2018 but could not take place due to land and other logistical challenges.
Nankabirwa said some of the money for the project came from the energy fund. The EXIM Bank of China provided $1.435b for the project, making up 85%, and the government provided $253.26, making up 15%.
She said that the power transmission network is in place and the distribution network will be worked on. She said that an education fund of $200,000 has been earmarked for Oyam, Kiryandongo, and Nwoya districts.
She also said that Sinohydro has contributed $18b for social corporate responsibility that includes building a health center and an orphanage in Kiryandongo district and the area.
In addition Sinohyrdro has provided food supplies and medical camps. She passed on condolences to the project-affected persons, and verification of compensation will be done.
Jessica Alupo, the vice president, said that the launch of Karuma is a sign of the steadfast development of Uganda in energy security.
Alupo said the project will ensure that sufficient energy is delivered and will lead to transforming Uganda into an industrialized nation.
“This will be a catalyst for improved service delivery; electricity impacts health, education, livelihood, and poverty reduction, among others,” Alupo said.
Alupo noted that the project has benefited the local communities in many ways, including building up health centers.
The function was attended by ministers, MPs, religious, district, cultural, and local leaders, and community members.
The dam commenced commercial operations on 12th June 2024. It has six vertical Francis turbine generator units, each with a capacity of 100 MW.
The operation of the project emphasizes not only power generation but also the safety of the dam, the surrounding population, the environment, and local wildlife.