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Uganda Government and Norway Sign USD54 Million Power Deal

Uganda and the Norwegian government have signed a $54 million (Norwegian Kroner 300 million) financing agreement for the construction of the Nkenda -Hoima transmission line.

The five year financing development cooperation that is set to take off 2012 will see the construction of a 227.7 km, 220kv double circuit transmission line to the Albertine Graben and facilitate the evacuation of power from the local mini hydros undertaken in the region.

Signing the agreement at the Ministry of Finance in Kampala, Keith Muhakanizi Permanent Secretary and Secretary to the Treasury in the Ministry of Finance Planning and Economic Development said the support is timely for the electrification of the western axis where oil was discovered.

"The high voltage transmission will go along way in providing the required back bone of power to the Albertine Graben," Muhakanizi explained. "It will provide for the evacuation of electricity from the proposed thermal power plant at Mputa, Hoima."

The project will be implemented by Uganda Electricity Transmission Company under the auspices of the Ministry of Energy and Mineral Development.

Thorbjorn Gaustadsaether, Norwegian Ambassador to Uganda said the transmission line will transform the communities in the western part of Uganda.

"Electricity is a necessity if you want economic and social transformation as it creates room for industrial growth," Gaustadsaether said.

"Power is relevant for the future oil and gas installations, agricultural production in terms of value addition and the manufacturing sector which comes along with social development."

The ambassador further noted that developing more power is essential though extending the grid can increase the population's access to modern energy services.The transmission line between kasese and hoima districts will follow the Rwenzori mountain range to enable new hydro power projects developed along the Rwenzori Mountains by allowing power be transported top the national grid.

The line will traverse through the districts of Kasese, Kabarole, Kyenjonjo, Kibaale and Hoima. Eriasi Kiyemba the Managing Director of UETCL said the power development will boost production in such areas especially in the manufacturing industries.

"The Tea Estates in Fort portal rely solely on bio mass which is a threat to the environment and so such developments prove a solution to environmental degradation," Kiyemba explained.

The Norwegian government has previously committed and disbursed more than $ 30Million to eight projects in other sectors in addition to the budget support in other sectors.

The agreement is the largest single grant agreement the embassy has signed with Uganda.

The East African Business Week

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