December 9, 2016
The German development bank KfW on behalf of the German Government and the French development bank AFD on behalf of the French Government both signed agreements with the Ministry of Finance, Planning and Economic Development for the construction of the Muzizi Hydropower Project.
KfW will provide a concessional loan of EUR 40 million and a grant of EUR 5 million while AFD contributes a concessional loan of EUR 45 million.
The Republic of Uganda will contribute an equity contribution of about EUR 20 million to ensure full financing of the project.
The total costs are estimated to be EUR 110 million.
The Muzizi project with a capacity of 45 MW will be developed by Uganda Electricity Generating Company (UEGCL).
UEGCL has already contracted the international consultant ILF Austria to complete the technical design of the project and support the procurement of a construction company. Construction works are expected to commence in 2018 and commissioning of the power plant in 2021.
The Muzizi project will increase the current power generation capacity in Uganda by about 5%.
The project will generate enough electricity to supply about 1 million people in Uganda with clean electricity from hydro power.
This creates an important precondition for rural electrification and economic development in the project area.
The project will also contribute to a sustainable growth pattern for the country and save 123,000 tons of CO2 emissions by replacing expensive and environmentally unfriendly diesel generators.