The Chief Executive Officer Uganda Electricity Generation Company Limited UEGCL, Eng Harrison Mutikanga, says the operation of Karuma and Isimba hydro dam projects will not be rented to Eskom Uganda Limited EUL.
Muwanga says there is no material uncertainty which may cast doubt on the companys ability to continue as a going concern. The Auditor General, however, points out a number of critical occurrences in the power generation sub-sector which require urgent attention.
Under the agreements, signed this morning, KfW will provide a concessional loan of EUR 40 million 153 billion Shillings and a grant of EUR 5 million 19 billion Shillings while AFD contributes a concessional loan of EUR 45 million 172 billion Shillings.
Lawrence Kizza, the director of economic affairs in the ministry of finance, says the money is being used to co-fund the construction of the 600-megawatt Karuma Dam. The dam is being constructed by Chinese firm Sino-hydro Corporation at a cost of 1.7 billion dollars with the government contributing 15 percent of the funding and the remaining 85 percent coming from Chinese development bank Exim.
According to the source, it was feared that CWE had a strong case, which could attract heavy compensation. However, Dâ€™Ujanga dismisses the claims as baseless rumors saying that its true CWE will construct Isimba but not because of the alleged reasons.
Karuma hydro project was scheduled to come on board before the country slips back into darkness while the recently completed 250-megawatt Bujagali Dam can still meet the current electricity demand, but construction is yet to commence.