In these days, the World Bank’s board of directors is considering a refinancing package for the controversial Bujagali hydropower station in Uganda.
In 1994 the Ugandan government realized the growing need of electricity in the country and started thinking about a hydropower power station to be built on the River Nile, around 10 km form Lake Victoria. In 2012, Blackstone, one of the most important Private Equity institution in the world, served as the leader investor for the $900 million power project, committing $116 million of equity. The Government of Uganda sustained the project with $20 million in capital and $63 form Industrial Promotion Services, and further funding came from the World Bank, The American Development Bank and the European Investment Bank.
Bujagali was one of the largest privately-funded power sector investments ever made in Sub-Saharan Africa.

Source: sourceable.net
The project was approved on the basis that it would bring affordable energy to Uganda, where 26 per cent of the population have access to electricity and only 8 per cent in the rural areas. Furthermore, the hydropower station would have generated 3000 jobs over 5 years and would have eliminated rolling blackouts, frequent in that country.
Today, six years on, the company that owns and operates the hydropower project, exceeds its budget and thus electricity tariffs are among the highest in the region and unaffordable for the major part of the local population. Consequentially, the Ugandan government wants now to negotiate a $500 million refinancing package - to be added on top of the tax breaks and longer payment plan agreed with the owning company- to cut tariff and to support the population.
World Bank’s board members are also considering the environmental damages caused by the Bujagali dam’s construction and at the recent agreement signed by the national government that will allow another dam to be built, with the likely probability that will increase the already existing natural and environmental situation.
“The request for refinancing presents an important opportunity to finally achieve resolution on a number of these outstanding issues ... we urge the World Bank Group to take this important opportunity to demonstrate its commitment to accountability and ensure access to remedy for project-affected peoples,” said a letter recently sent to World Bank chiefs, which was signed by more than twenty local and international NGOs.
Post-investment integration is still the most critical part of the job, ever for big players.
- Susanna Pozzo
Comentários