Uganda To Stop Buying Power From 2 Thermal Plants This Year -Minister
July 15 2011 - 3:07AM
Dow Jones News
Uganda's government will stop buying expensive power from two
thermal plants owned by London-listed Aggreko PLC (AGK.LN), in a
bid to reduce its electricity subsidy burden, Minister of Energy
and Minerals Irene Muloni said Friday.
The government will terminate its contract with the Kiira and
Mutundwe plants--which have a combined capacity of 100
megawatts--by November, when the first unit of the 250 MW Bujagali
Hydropower Project is commissioned.
Power from the Bujagali project will be cheaper and eliminate
the need for expensive thermal power, Muloni said.
The Bujagali project is jointly owned by Sithe Global Power LLC
and the Aga Khan Fund for Economic Development.
Aggreko officials couldn't comment immediately.
Uganda has been grappling with acute power outages over the past
two weeks, after two thermal plants were shut down due to unpaid
arrears of around 300 billion Ugandan shillings, or $118
million.
The country spends at least $300 million every year on
subsidizing thermal power plants, which supply most of the power
generated to primary processing industries handling coffee, cotton,
cocoa, tea, fish and horticulture products.
Uganda, which contracted thermal generators in 2006 to
supplement hydropower, is expected to retain some heavy oil-fired
plants that will be using crude oil produced in the Lake Albertine
rift basin during an extended well testing program expected to
commence before the end of the year.
UK-based Tullow Oil PLC (TLW.LN) is expected to conduct the
program in three blocks in the Lake Albertine rift, where at least
1 billion barrels of oil have been discovered.
Uganda is expected to start commercial oil production by
2014.
-By Nicholas Bariyo, contributing to Dow Jones Newswires;
256-75-2624615 bariyonic@yahoo.co.uk
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