South Africa’s Energy Company Returns Ugandan Power Plants As Gov’t Declines To Renew Its Licence

South Africa’s Energy Company Returns Ugandan Power Plants As Gov’t Declines To Renew Its Licence

By Spy Uganda Correspondent

South Africa’s power firm Eskom returned two hydropower plants to Uganda’s government on Tuesday after Ugandan authorities declined to renew its licence, Uganda’s energy minister said.

Under a 20-year concession signed in 2002, Eskom had been running the two plants located at the source of the River Nile in Jinja, about 90 km (56 miles) east of the capital Kampala.

Both plants have a combined installed generation capacity of 380 megawatts.

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Last year the government said it would not renew Eskom’s licence when it expired this month and would instead run the plants as part of plans to reduce power costs to consumers.

Part of those plans, according to the government, was to reduce private capital in the sector.

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“We also strongly believe that Eskom has built adequate local capacity that will be able to continue the proper operations and maintenance of the complex,” Energy Minister Ruth Ssentamu Nankabirwa said while taking over the plants from Eskom.

In a speech during Eskom’s transfer, Nankabirwa said state-run Uganda Electricity Generation Company Ltd (UEGCL) will now operate the plants.

She said the government was conducting an audit to determine if it owed Eskom any compensation for un-recouped investments.

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“Government of Uganda is ready to fulfil the outstanding obligations that will arise out of this audit.”

Uganda has an installed capacity of about 1,400 MW of power and that will rise to 2000 MW when a Chinese-built plant, Karuma, also on River Nile is commissioned expected this year.

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