The World Bank said on Wednesday it was likely to approve a $500m project to build a 250 MW power dam at Bujagali Falls on the Nile in Uganda. “We from the bank are prepared to go forward and put this project to our board in the next few weeks,” Callisto Madavo, the bank’s regional vice-president for Africa told a news conference.
The bank will be the key backer of the project through its private sector lending arm the International Finance Corporation (IFC). It will be the region’s single largest private investment.
The dam on the river Nile is due to be built by a local affiliate of U.S. firm AES Nile Independent Power, and construction should begin in the first half of next year.
The project has been under development since 1994 and came under intense scrutiny from environmentalists and civil society before getting the government green light in early 2000.
Critics say the dam would create a socially and environmentally destructive reservoir and would drown the spectacular Bujagali Falls. They also maintain that the project’s power would not meet the needs of the vast majority of the population.
Uganda frequently suffers from power outages. A survey of investors two years ago showed that at least 90 productive days were lost annually as a result.
The number of outages last year fell to twice a week from daily after 80 MW were added to the 180 MW already being supplied.
Analysts say that increasing Uganda’s electric power capacity is crucial to attaining the seven-percent economic growth required for sustainable development.
Local environmentalists believe the dam will harm Uganda’s chances to pursue true renewables like solar and wind, and point out that this project will do nothing to assist the 95 per cent of Uganda’s population who are not connected to the national grid.