Uganda seeking ways to refinance Bujagali power dam

Uganda is looking for a way to refinance the private debt built up by developers of the Bujagali hydropower dam in a bid to cut the cost of electricity, particularly for industry, President Yoweri Museveni said on Thursday.
The 250-megawatt (MW) Bujagali dam on the River Nile, developed by U.S. Blackstone Group and the Aga Khan Development Network, was financed by the World Bank, and several European development finance agencies.
Commissioned in 2012, it cost nearly $900 million.
In a state of the nation address, Museveni said his government had made a mistake by agreeing to buy the power generated by Bujagali at 10.1 U.S. cents per kilowatt hour which he said was too high and was partly responsible for the high cost of electricity in the country.
Museveni said the developers had cited expensive loans and the high cost of construction materials at the time to justify their high unit cost.
"We are going to engage the developers to find ways of refinancing this project," he said.
"With our oil money this should not be a problem. However, even before our oil money, we may be able to get cheaper money to pay off this expensive money borrowed by developers."
Uganda is expected to start pumping crude from its commercial reserves in its west in 2018.
Museveni did not give details of how the project would be refinanced or whether that would involve renegotiating the contract with the developers.
Ugandan manufacturers and other big businesses have often complained of the high cost of electricity in the country which they say makes their products uncompetitive in the region.
Uganda is developing two more hydropower dams, Karuma and Isimba, on the Nile with a combined capacity of 780 MW.
Both are being funded by concessionary loans from China, and Museveni said the power generated from both would be far cheaper with Karuma's costing 5 U.S. cents while Isimba's would cost 4 U.S. cents per kilowatt hour.
Museveni also said his government was aiming to boost coffee output by embarking on an aggressive tree replanting programme, although he did not give a timeframe.
"We want all the old 220 million coffee trees to be replaced by new ones that produce four times more coffee," he said.
"By simply doing this, coffee production in Uganda will go from the present 4 million bags per annum to 20 million bags."