Bujagali Power Dam Project Must Go On, Says; Eskom Cited in Fresh Plans
The Monitor (Kampala)August 15, 2003
Posted to the web August 15, 2003 Badru D. Mulumba
Kampala
The Energy minister, Ms Syda Bbumba, was in a bullish mood yesterday, despite the withdrawal of AES Corporation from the Bujagali Power Dam Project."As the President indicated two years ago, Bujagali will be developed. I think Bujagali will be developed with or without AES. I think you had better be patient," Bbumba said.AES, which is based in the United States, said in its quarterly report filed with the Securities and Exchange Commission on Wednesday that it was pulling out of the Bujagali project.
The company announced that it was going to write-off $75 million (Shs 150 billion) it had invested in the failed venture.Meanwhile, a California-based NGO, the International Rivers Network revealed that South African power company, Eskom, might want to take over the project.IRN, which campaigns against damming rivers, has been a vocal critic of the Bujagali project on environmental grounds.In a statement signed by Ms Lori Pottinger, IRN said, "AES has lost $75 million in the Bujagali adventure.
We hope this sends a message of caution to other power companies, such as South Africa's Eskom, which might consider investing in this uneconomic project."The state minister for Energy, Mr Daudi Migereko, had earlier said, "We are working with our development partners to see how to proceed."In its report, AES said it was working with the government of Uganda and the World Bank to see to it that the project proceeds without them.
But plans to go ahead with the power project will have to go back to the drawing board, according to Rubaga South MP Ken Lukyamuzi."The Power Purchase Agreement was approved through Parliament, so any fresh agreement must come back to Parliament," said the MP who is a member of the Parliamentary Committee on Natural Resources.The departure of AES should pave the way for Norpak, the Norwegian power company interested in the Karuma Power Project.Migereko said, "Norpak has been working on its financial restructuring. Even when we have been working with AES, we were in contact with Norpak.
They are developing their proposal."The impact of AES' withdrawal had not yet been determined by yesterday, although sources said up to 20 jobs are likely to be lost.The chairman of its local subsidiary, the AES Nile Power, Mr George Kihuguru, said, "You will have to talk to our officials in Washington."
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