The European Union is set to invest $63 million in upgrading one of Uganda’s largest hydropower plants, in an effort to address the financing gap and modernise the country’s ageing energy infrastructure.
The Nalubaale and Kiira hydropower plant complex, located at the source of the River Nile in Jinja, is Uganda’s oldest power plant and has been in operation since 1954. With a capacity of approximately 380 megawatts (MW), this plant plays a crucial role in providing electricity to the region.
Previously, South African power company Eskom had been running the plant under a 20-year concession agreement that ended earlier this year. Following the expiration of the agreement, the Ugandan government regained control of the plant.
Recognizing the need for rehabilitation and improvement, the EU has committed to investing $63 million in the upgrading of the Kiira and Nalubaale hydropower plant. This significant investment is aimed at ensuring reliable energy supply to support Uganda’s industrialization efforts.
Jan Sadek, the EU’s ambassador to Uganda, made this announcement during a mining conference held in the capital city, Kampala. However, Sadek did not provide specific details regarding the start of the project or whether the funding would be in the form of a grant or credit. Nonetheless, the investment will be made under the EU’s global gateways strategy, which aligns with the United Nations’ Sustainable Development Goals to be achieved by 2030.
The current state of Uganda’s energy infrastructure is a cause for concern, with inadequate funding and an ageing network resulting in frequent power outages and occasional breakdowns. With an installed capacity of around 1,400 MW, mostly from hydropower dams, Uganda’s power generation capacity is set to increase to 2,000 MW once the Chinese-built Karuma plant on the River Nile becomes operational this year.
By investing in the rehabilitation of the Kiira and Nalubaale hydropower plant, the EU aims to address these challenges and ensure a more stable power supply for Uganda. This investment will not only provide reliable energy for industrial activities but will also contribute to the country’s economic growth and development. Additionally, by supporting the country’s energy sector, the EU is promoting cleaner and more sustainable energy sources, in line with global efforts to combat climate change.
Uganda’s government has been actively seeking foreign investments to boost its energy sector and bridge the financing gap. The EU’s commitment to investing in the country’s power plant demonstrates its confidence in Uganda’s potential for growth and development.