Uganda: Investments and Ambitious Energy Projects

June 7, 2009

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In Uganda, the economy is so far resisting the global economic slowdown. A fresh poll from 2009 shows Uganda with a growth of almost 6% during the first few quarters of the year.

Due to the recent discovery of oil reserves, Ugandan President Yoweri Museveni announced on Thursday that the East African nation will double its energy capacity by exploiting two gas deposits and completing two hydropower dams by the end of 2010.

Analysts say the production of cheap energy using the newly discovered oil resource is likely to make Uganda a hot destination for manufacturers. Currently Uganda is undergoing an energy crisis which has forced some of the local manufacturers to move their production facilities to other countries in the region.

Uganda’s new oil and gas finds are estimated at more than one billion barrels, and are mostly located around Lake Albert where oil companies recently have started to announce new discoveries on a regular basis.

The new energy projects are planned to come to completion as Uganda is preparing for national election in 2011, which is expected to be an important election in which Museveni might very well stand for another term.

“Cheap energy and transport will lower the costs of doing business in Africa and increase competitiveness”  
Yoweri Museveni, President of Uganda

When Uganda starts to fully exploit its oil resources, its economic relationship with Kenya is likely to change since Kenya has been the main supply route for Uganda’s petroleum products. Kenya might also lose tax revenue from petroleum products destined for Uganda. Kenyan transport companies and import & export firms could be facing a downturn.

Uganda’s President Yoweri Museveni states that he targets the construction of  two new gas fields for power generation. Also, the Bujagali dam of 250 MW should go operational by the end of 2010, and the Ugandan government is likely to fund the 700 MW Karuma Falls Hydropower Plant that was delayed after a European contractor pulled out. The cost of construction for this giant hydropower project is estimated to be around $1 billion US Dollars.

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{ 1 comment… read it below or add one }

1 Ender Berett August 8, 2012 at 04:53

It’s amazing how some things just set a government on the right course. Even something as seemingly small as corn export can change the way a company functions! Thanks for the interesting article.

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