East African Leaders Promote Regional Automobile Business

The Kayoola bus in Uganda will be using solar energy

The overall construction progress of the Karuma Hydropower Project is on schedule, information pills Dr Fred Kagambe-Kaliisa the Permanent Secretary of the Ministry of Energy and Mineral Development, has disclosed.

He assessed during an on-spot field inspection of both Karuma and Isimba Hydropower Projects to understand the progress and assess where they are against the targets set and challenges faced during construction last week (23 -14 February 2016).

Kabagambe-Kaliisa said construction work is in the range of 27 – 30 percent complete in terms of civil works completion, indicating that significant progress has been made in other critical aspects such as excavation of the powerhouse.

“The powerhouse excavation is near completion. That is the most important aspects of the construction of underground power systems and stations like Karuma,” Kabagambe-Kaliisa assessed.

The Permanent Secretary said the project is “a very benign project because it does not interfere with what is going on in the (Wildlife) Park Area.”

Karuma Hydropower Project is located in Kiryandongo district, which is also partly home of Karuma Wildlife Reserve and is planned to produce 600 megawatts of electricity.

The project is developed by the Ministry Energy and Mineral Development representing the Government of the Republic of Uganda through a bilateral agreement with the Peoples Republic of China. M/S Sinohydro Corporation is the project contractor.

Kabagambe-Kaliisa revealed that part of the project area will be gazetted as an industrial park so that power is consumed directly instead of transmitting it to distant areas.

“We are going to ensure there is good physical planning for Karuma area for factories, offices and residential areas,” he said.

Karuma Hydropower Project will also improve community services such as clean water supply, improved education and health facilities in nearby villages, and enhanced road infrastructure, Kagagambe-Kaliisa said.

“We are now starting to develop those amenities such as schools, churches and mosques and heath facilities,” he added.

Cost of power

“This project is also going to build two hospitals. That is going to have a very good impact on the project.

Karuma Hydropower Project, when commissioned in December 2018, is expected to lower the base cost of electricity and ensure adequate power supply in Uganda.

Kabagambe-Kaliisa explained that the generation cost of electricity would reduce because of the competitive cost of capital, lower interest rates and timely completion of the project, playing an important catalyst for accelerated social and economic development.

“This Engineering, Procurement and Construction (EPC) contract was competitively bid for at a cost of $1.4b. The original cost in the feasibility study had put the capital cost at $2b.  The cost of lending was also very competitive,” he reflected.

Dr Kabagambe-Kaliisa said the decision of government to borrow money and invest in the project has also helped reduce the interest rates that would be paid back.

“The cost of borrowing for Karuma project is 3 percent. This is low compared to a weighted average capital of 13 – 15 percent if the money is from private capital,” he assessed, adding that completing the project on time would also bring down the cost of electricity in Uganda.

“We are very optimistic that we shall complete the projects in on time. Once the project is not delayed but progresses as scheduled, then the electricity tariffs can be controlled.”

The 17th Ordinary East African Community (EAC) Heads of State Summit has been rescheduled for 2nd March, cost 2016 in Arusha, Tanzania with promotion of locally-assembly motor vehicles high on the agenda.

According to a statement sent to ChimpReports on Thursday, EAC officials said the meeting will consider Council reports on “modalities for promotion of motor vehicle assembly in the region and reduction of the importation of used motor vehicles from outside the community.”

Observers say the move will see East African countries buy automobiles from within the region, with Ugandan standing a better chance to reap from sale of locally made cars.

In 2010 President Museveni established the Presidential Initiative to support Science, Technology and Innovations at Makerere University by directing Government to ring fence Shs 25 billion (approximately US$ 10million at the time) over a span five years 2010-2015 for this cause.

According to Prof. Dr. Sandy Stevens Tickodri-Togboa, Minister of State for Higher Education, Science and Technology, this initiative unleashed world-class talent among students in the College of Engineering, Design Art and Technology.

Together with their mentors they produced an electric car, the KIIRA Electric Vehicle Car, a proof-of-concept, to demonstrate that they had the skill, capability, capacity, passion and discipline to boldly take on innovations.

With an annual budgetary provision of Shs 10 billion since 2012, Government is continuing to support the process of commercialization of the Kiira EV Project through the formation of KIIRA Motors Corporation with expectation to roll out the first Ugandan manufactured vehicle in 2018.

By 2039, Kiira Motors will be able to manufacture original equipment and provide over 12,000 jobs, according to Prof. Tickodri.

“Such an investment will help catalyse linkages with other sectors and finance value addition especially in the oil and gas industry. Consequently, capital intensive projects like the standard gauge railway, roads, power dams will be funded,” said the Professor.

ChimpReports understands government has already provided 100 acres of land for the establishment of the Kiira Motors manufacturing plant in the Jinja Industrial business park.

The establishment of the plant requires Shs 470Bn and is projected to take at least 3 years.

The team wants government to provide timely financial resources as well as put in place a well structured policy framework for the business road map.

EAC business

Meanwhile, in Arusha, leaders will as well brainstorm on the promotion of the textile and leather industries in the region, and stopping importation of used clothes, shoes and other leather products from outside the region.

The long-awaited meeting will as well consider reports by the EAC Council of Ministers on the negotiations on the admission of South Sudan into the Community; Sustainable Financing Mechanisms for the EAC, and; the EAC Institutional Review.

The convention will consider Council reports on the Model, Structure and Action Plan of the EAC Political Federation.

The Summit is also expected to deliberate on a report by the Council on the verification exercise for the admission of Somalia into the EAC.

The Heads of State are expected to launch the new International East African e-passport (electronic-passport) during the meeting.

Also scheduled to be launched by the Summit is the Private Sector Partnership Fund which is expected to deepen the participation of the private sector in the East African integration.

The Summit will be preceded by a meeting of the EAC Council of Ministers that will take place at the EAC Headquarters in Arusha on 29th February 2016.


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