Moses Owidi’s real-estate agency sits in the middle of a bustling suburb in the Ugandan capital, Kampala. But Owidi’s business has been losing customers for more than a year because of increasingly frequent power cuts. Simple electronic tasks take longer because they have to be done manually. Owidi’s clients have become impatient, and unforeseen costs are regularly incurred.
“The power situation has forced me to get a generator that I can’t afford,” said Owidi, adding that there is not even a regular load-shedding schedule. The electricity is cut every day for half of the day, but it is impossible to know during which part of the day the power will go off.
Brian Kivumbi, who owns an internet café near the city centre, agrees. His café has experienced two blackouts in the past month, and his customers have left during the cuts.
Business people are among the many who are frustrated with Uganda’s erratic power supply. The government’s new answer to the energy problem rests on the Bujagali hydropower project, for which the World Bank granted $360-million in loans last week. The country’s electricity is currently supplied by the Nalubaale and Kiira dams, both of which are situated on the Nile River.
Between them they were designed to supply 380MW of power. Yet since they rely on the flow of water from Lake Victoria, which has been decreasing, they only produce 120MW. As a result, Ugandans have become accustomed to regular blackouts.
According to Bujagali Energy, a private joint venture between a Kenyan and an American company, the lake is being drained at a faster rate because the two previous dams lie parallel to one other.
They argue that because the Bujagali Dam will be downstream and will be using the natural water flow, it should perform better.
Hydroelectric power supplies 99% of Ugandan electricity. The Bujagali Dam is expected to supply an additional 250MW of power and will cost an estimated $750-million.
Only 5% of Ugandan homes have access to electricity. For those who do get power, Bujagali Energy says the dam will eliminate power cuts in the short term and drastically lower energy prices. The dam will stabilise the supply for current customers, but the developer says that a new power source will be needed for future demand.
“Bujagali Dam should fully address the current energy crisis the country is facing,” said Jimmy Kiberu, a communications consultant with Bujagali Energy. According to the company, customers are now paying US24c per unit of electricity, an amount that is already subsidised. After the dam is completed, the rate should drop to around 6c.
Proponents of the dam say that the project will contribute to industrialisation and economic growth, which have suffered since the onset of the power problems more than a decade ago. According to the International Finance Corporation, Uganda suffered a 1% drop in GDP in the 2005/06 financial year because of the energy crisis.
Environmentalists, however, are strongly opposed to the dam. Bujagali Energy says the dam will not affect water levels in Lake Victoria, but many are sceptical. “How do you expect the Bujagali Dam to produce 250MW of power without withdrawing water from Lake Victoria?” asked Frank Muramuzi, executive director of the National Association of Professional Environmentalists.
When the first dams were built, Uganda agreed to release only a certain amount of water from the lake to feed the projects, as it shares Lake Victoria and the Nile with other countries. But Uganda has already exceeded that amount in its quest for more electricity, he says.
Muramuzi said that with impending climate changes and potential degradation of water catchment areas such as Mabira Forest, tampering with the lake’s water levels is risky. He added that vital ecosystems that depend on the lake will inevitably be damaged. Environmental activists have also said that the hydropower project is overpriced and will draw much-needed money away from the country’s poorest.
Bujagali Dam will be one of the largest investments in East Africa. Construction will start this June and is expected to take 44 months. About 90 families have been moved from the dam area and have been promised reimbursement by the government.