A delay in the completion and commissioning of the 600MW Karuma Hydropower Project in Kiryandongo District will cost the government an accrual interest claim of 113.933 billion Shillings on delayed payments, the Auditor General’s report has revealed.
According to the audit report on the progress of electricity generation infrastructure projects covering the Financial Year that ended on 30 June 2023, Karuma Dam was planned to be completed within 60 months but the actual duration of implementation is currently 114 months, a delay of 54 months.
Construction of Karama Hydroelectric Station, the largest power-generating installation in the country started in 2013. The project cost was initially estimated at USD 1.7 billion, approximately 6.323 trillion Shillings but the charge has since skyrocketed to 8.183 trillion Shillings due to implementation challenges.
“Other implementation challenges include the accrual of interest claims of USD 30 million (about 113.933 billion Shillings) on delayed payments, the delayed acquisition of reservoir land, and the slow progress of the Resettlement Action Plan (RAP), revealed the Audit report released on Tuesday.
The Audit report noted that while the overall physical progress of the project is now at 99.9 percent, there are further delays in the implementation of the Community Development Action Plan (CDAP) projects. They include the construction of the Seed school, hospital, mosque, church, and compensation of persons affected by blasting during construction which have not progressed as planned.
“Management explained that full implementation of the Community Development Action Plan was hindered by the unavailability of funds despite being budgeted for,” the Auditor General reported.
Karuma was expected to be completed by 2018 but the project underwent unprecedented delays and extensions. Sidronious Okasaai Opolot, the State Minister for Energy explained that the dam was expected to be ready by 2019, but still, it suffered several other encumbrances such as vandalism among others.
Okasaai told URN that as of now, four out of the six units are fully operational and synchronized to the national grid. The fourth unit is pending completion by the end of November while the sixth unit will be ready earliest September 2024 to enable optimum functionality of the decade-long hydroelectric facility.
Karuma Power plant located along the River Nile is among the ongoing generation plants under the Ministry of Energy and Mineral Development aimed at meeting Uganda’s 52,000MW of generation capacity by 2040 to spur the country’s sustainable economic growth.
Once completed, the country’s installed electricity capacity is projected to hit at least 2000 MW. Other power plants include the 183MW Isimba Hydro Power Project in Kayunga, 83MW Achwa Hydroelectric Power in Pader, and 3.5MW Nyagak Power Plant in Zombo District.
The government has set a target of achieving universal access to electricity by 2030 but plans to connect an additional 1.5 million households to the grid and increase the electrification rate from 28% to 50%.
Currently, Uganda has an installed electricity capacity of 1,402 megawatts as of December 2022, according to the Electricity Regulatory Authority (ERA), with demand at 843 MW leaving a surplus of 559 MW.
In October, the Government launched the Energy Policy 2023 to scale up access to electricity for households, refugee and host communities, industrial parks, commercial enterprises, and public institutions, to spur socio-economic transformation, in line with Uganda’s Vision 2040.