Uganda's government said on Thursday it planned to borrow 85 million euros ($95 million) from French and Germany development finance institutions to pay for a new hydro power plant to meet growing electricity demand.
The east African country has accelerated investments in its energy sector after years of neglect, aiming to generate sufficient electricity to drive economic growth.
Information Minister Jim Muhwezi said in a statement the finance ministry would borrow 45 million Euros from the French Agency for Development and 40 million Euros from Germany's state controlled development bank KFW to fund the Muzizi hydro power dam meant to generate 44.7 megawatts (MW) of electricity.
Uganda currently has an installed electricity generation capacity of 850 MW. Two large hydro power plants, Karuma and Isimba, with a combined generation capacity of 780 MW are being developed on the river Nile.
The IMF projects Uganda's economy will expand at 5.8 percent in the 2015/16 (July-June) fiscal year from an estimated 5.3 percent in the previous, largely due to public investments.
The government is at various stages of implementing several multi-billion dollar projects, including hydro power dams, a refinery, express highways and a railway line.
($1 = 0.8964 euros) (Reporting by Elias Biryabarema; Editing by James Macharia)
Reuters , May 21
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