Govt Receives €90M from France, Germany for Construction of Muzizi Hydro Power Plant

L-R  Oliver Junger (L) Director Kfw in Uganda French Ambassador to Uganda Stephanie Rivoal, Bruno Deprice the AFD Regional Director, Finance Minister Matia Kasaija and Harrison Mutikanga CEO Uganda Electricity Generation Company Limited (UEGCL) after the official signing of the financing agreement on Friday

Government of Uganda together with German Development Bank Kfw and French Development Agency AFD have Friday signed a financing agreement for the 44.7 Megawatt Muzizi hydro power project. The project in Kibale District southeast of L. Albert which is estimated to cost Euros 110 million is designed as a run-of-the-river power plant.

It will have a total annual energy production of 220 GWh, this equivalent to the power demand of 60,000 households.

The financing from the two agencies (Kfw and AFD) is a combination of concessional loans and grants with KFW providing Euro 40 million while AFD availed Euro 45 million. Kfw will further provide a grant of Euro 5.24 million while the government of Uganda will make an additional contribution of Euro 21 million.

The agreement was signed by the Finance Minister Matia Kasaija on behalf of the Uganda government and the French Ambassador H.E Stephanie Rivoal and Oliver Junger the Director of Kfw in Uganda.

In his remarks, Minister Kasaija hailed the two development partners for the financial boost saying the project will contribute towards stabilizing the power grid in the western part of Uganda as well as facilitate industrialization.

“The Muzizi power project will provide cheap and clean energy for the people in the area who rely mainly on forests for charcoal which they use for cooking. Furthermore, you can’t talk of industrialization without taking about electricity,” Kasaija said. He however warned the implementing agencies like the Ministry of Energy against laxity especially regarding counter funding.

The French Ambassador Stephanie Rivoal said the loan is aimed at supporting government through infrastructure development as well as to meet the energy needs for social and economic development.

“We hope this investment will increase economic activity, reduce poverty and also mitigate the effects of climate change in Uganda,” H.E Rivoall said.

In the short and medium term, the Muzizi power project will create employment opportunities for the locals. During its construction which will take 3 to 4 years, an estimated 300 to 500 workers will be employed.


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