World Bank gives Uganda USD120m loan for power

Wednesday July 13, 2011

THE World Bank has agreed to give Uganda a $120m loan to upgrade the Kawanda-Masaka transmission line.

This comes as support to the Governments’ effort to connect quality electricity to towns and villages.

“Availability of electricity will increase opportunities for greater economic activity and improve the quality of lives of the people” Somin Mukherji, the World Bank team leader, said in a statement yesterday.

Part of the money, according to the World Bank, will be used to resettle people who will be displaced by the project, offer technical assistance during the project execution and build capacity in the energy sector.

The assistance comes at a time when the Government admitted that it had failed to achieve the 10% rural electrification target set 10 years ago.

Currently, rural electrification stands at 6%, according to energy state minister Simon D’Ujanga.

Uganda currently faces a 12-hour daily load-shedding after firms operating thermal power generators switched them off in protest of unpaid dues by the Government.

Today, Uganda’s power supply stands at about 304MW, yet the demand for electricity is about 400MW, according to the Electricity Regulatory Authority (ERA).

This has created a shortage of over 50MW during the day.

However, the quality of electricity that the Kawanda-Masaka transmission line will extend to the rural people will depend on the availability of power.

Increased power generation, according to ERA, is expected to come from the Bujagali hydropower project which is near completion.

The World Bank has also approved a $50m policy loan for Uganda to build a robust financial sector which can support private sector growth.

“The loan will support the Government’s financial sector reform programme, which aims at fostering financial intermediation and savings mobilisation,” Javier Suarez, the bank’s senior economist, said.

By Ibrahim Kasita: The New Vision Newspaper