Oil Cash: How Energy Ministry Blew Trillions on Power Dams

In this financial year of 2016/2017, recipe officials from the Ministry of Energy and Mineral Development and affiliated agencies have been allocated Shs 68.5bn to supervise the Karuma and Isimba power projects.

The total of Shs. 82bn spent on the supervision of two projects is nearly the amount allocated to the ICT Ministry (Shs 93bn) in the 2016/2017 budget.

The earlier unexplained USD 631m in oil revenues collected between 2010 and early 2015 before the opening of the Petroleum Fund account, cheap was all spent on three projects under the Ministry of Energy, Chimpreports has learnt.

This money was under unexplained circumstances deposited to the Consolidated Fund rather than the Petroleum Fund.

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Out of the USD 696m so far collected by the government, the Petroleum Fund dollar account number 003300328400010 and shillings account number 00330028000026 only have USD$ 72m and Shs 10bn respectively.

It has emerged that Government spent a better portion of the USD 631m on Project related costs on the Karuma and Isimba Hydro Power Dams and the construction of power transmission lines under Uganda Electricity Transmission Company Limited.

The oil money was not spent on the construction of the two dams but only handled “related costs”, according to the documents from the Ministry of Finance.

In the budget of financial year 2013/2014, Shs 120bn was picked from the oil money to support project related costs of the two dams.

In the budget of 2014/2015, Shs 973.8bn was again used to support the same projects.

In the same financial year, the officials of Ministry of Energy, Uganda Electricity Transmission Company Limited (UETCL) and Uganda Electricity Generation Company Limited (UEGCL) started supervising the projects.

Shs 8.7bn was given to the officials for supervision.

In the 2015/2016 budget, Shs 239bn was again withdrawn to supplement project related costs of Karuma and Isimba hydro power projects.

In the same financial year another 4.9bn and Shs 30.6bn was withdrawn from the same account for supervision and construction of power transmission lines under UETCL respectively.

In this financial year of 2016/2017 the related cost for the two projects got zero but stunningly the officials of Energy Ministry, UEGCL and UETCL spent Shs 68.5bn on supervision as earlier stated.

In the same financial year, Shs 197bn was given to UETCL for the construction of power transmission lines.

The grand total of the four financial years’ expenditure is Shs 1.643tn.

The total cost for the construction of 600 MW Karumahydro power is USD$ 1.7bn (about Shs 4.3tn).

The bilateral agreement between the government of Uganda and China adopted before the start of the project in 2013 says EXIM Bank (China) is to provide 85 percent of the cost and Kampala to foot the remaining 15 percent.

Meanwhile, the total cost for the Isimba dam is USD$ 589.5 to be funded under the same arrangement with China (85% and 15%).

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