27 November 2002 – South Africa’s Eskom Enterprises on Tuesday successfully bid to run two Ugandan hydroelectric dams ahead of rival bids from Spanish and Indian firms.
The two power dams situated on the River Nile currently supply most of Uganda’s power and have a maximum output of 380 MW.
Eskom, one of the world’s largest power utilities and Africa’s biggest in terms of capacity, is heavily involved in the continent, providing up to 60 percent of Africa’s power.
“With the selling of this concession to a more efficient operator, government is looking forward to greater economic gains that will come with increased power supply,” energy minister Syda Bumba said at the signing ceremony.
Eskom Enterprises, a wholly owned subsidiary of the Eskom Group, will pay
$500 000 up front and then a monthly concession fee that will factor in government’s debt obligations, asset depreciation and administrative costs, finance ministry officials said.
“We hope to refurbish the two plants, increase productivity and introduce efficiency methods in order to improve supply to Uganda Electricity Transmission Company,” Eskom Enterprises CEO Enos Banda said.
Eskom outbid Spain’s Union Fenosa and the Tata Power Co. of India.
“Awarding Eskom Enterprises this concession heralds a step toward creating an African power grid,” Banda said.
“It gives Eskom Enterprises control of one of the largest hydro facilities in Northeast Africa and a firm strategic foothold in the region.”
The African grid is part of an ambitious African recovery plan, called the New Partnership for Africa’s development (NEPAD), which in part aims to boost infrastructure development on the continent.
The selling of the concession comes at the tail end of a restructuring process of Uganda’s power sector which started in 1999. The government split up the state-owned power utility and plans to lease out the distribution arm next year and retain the transmission arm.
American firm AES Nile Power have been licensed to build a $500m dam downstream from Eskom’s facilities but construction has been delayed by a US State Department corruption investigation into the project.