Uganda to build 600-megawatt Dam on Nile River

June 21, 2013

KAMPALA, June 20 (Reuters) – Uganda on Thursday signed a contract granting China’s Sinohydro Group Ltd. a tender to build a large hydropower dam on the Nile River at a price of $1.65 billion, government sources said, reviving a project stalled for years by a lack of money.

Construction of the 600-megawatt Karuma dam in the east African country is expected to start about two weeks after the signing of the contract, the sources said.

Last week Uganda said China had provided credit worth $500 million to help pay for construction of the Karuma dam.

China, as elsewhere in sub-Saharan Africa, has rapidly expanded its investment in Uganda in recent years.

“The project will cost $1.65 billion and will entail both developing the dam and a transmission line to evacuate the power from the generation site to the distribution network,” one of the sources, who declined to be named, told Reuters.

“The signing took place this morning and Synohydro was represented by the company’s Chairman, Mr. Zhang Yunli while the government was represented by the Attorney General, Peter Nyombi and Energy Minister, Irene Muloni.”

Uganda is banking on Karuma to generate cheap, sufficient power to meet fast-growing energy needs and support an economy eyeing double-digit growth rates once crude oil production starts as anticipated in 2017