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World Bank says backs Uganda hydropower project

The World Bank supports long- delayed plans by Uganda to build a new $400-million hydropower plant on the Nile, but the extent of its financial involvement is yet to be decided, the international lender said yesterday.
State-owned media in the east African country had said Bank President Paul Wolfowitz pledged to fund construction of the troubled Bujagali dam when he met Uganda's President Yoweri Museveni in Washington D.C. last week.

The 250 megawatt plant would slash the nation's crippling electricity shortages, but the project has repeatedly floundered amid claims of bribery and a campaign by a small but vocal environmental lobby.

In a statement, the bank said it had confirmed its support for the Bujagali plans, but was waiting for the government to finalise talks with private investors.

"World Bank Group financial support of this project will require a transparent and competitive bidding process for the hydropower plant and transmission line," it said.

The project would have to comply with the bank's environmental and social policies, it added.

A bank official in Kampala said it was hoped the government would finish talks by the end of October.

Even though less than 5% of Uganda's 25-million people have access to the national grid, the system is struggling as demand rises at about eight percent a year.

The government installed a 50 MW diesel generator in the capital Kampala earlier this year, but it is proving increasingly expensive because of high fuel costs.

In addition to Bujagali there are plans for a smaller 200 MW dam downstream on the Nile at Karuma Falls, but neither project will come online for several years.

Additional information: 28 Sept 2005
News date: 30/09/2005

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