Failure by the Uganda Electricity Transmission Company Limited (UETCL) to construct a power transmission line to evacuate electricity from the Achwa 2 hydro dam in Pader District, will see government pay UGX300b in deemed energy costs.
CEO East Africa Magazine has learnt that officials from the Ministry Energy and Mineral Development led by Minister Mary Goret Kitutu submitted without publicly substantiating a document indicating the contractual obligations where UGX100b is needed in the 2021/2022 financial year to pay the contractor.
A whooping UGX100b was already allocated for the redeemed costs in the current financial year and MPs who saw the document indicate that, government will need to pay another UGX100b in the 2022/2023 financial year to cover the deemed energy costs.
Deemed energy is the power that should have been dispatched but it is not as a result of a non-existent or weak grid.
In this case, the deemed energy from the Achwa 2 Dam that was completed in January 2020 was supposed to be distributed to Kitgum District and Layibi area outside Gulu City via a 33kV power line. This would take 12 Megawatts out of the capacity generation of 42 megawatts. It is the construction of the 132kV high voltage transmission line at the substation in Lira that has dragged due to what UETCL officials have in the past blamed on disagreements over land compensation.
The power dam was constructed by PAC SpA, an Italian construction company which handled civil works and Voith, a German manufacturer supplied the four turbines and associated electro-mechanical parts.
The construction of the dam on Achwa River costed about UGX400b of which UGX51.6b was a loan from the African Development Bank and UGX232.3b from the Delta and other sources whereas the rest of the money was expected from co-financing by the government.
But with UETCL failing to construct the evacuation line to Lira, the taxpayer will fork out the money to pay the contractor because the sale of the electricity would have handled the repayment of the money.
Ruhinda North MP Thomas Tayebwa, a member of the Committee on Natural Resources, told Journalists after the meeting with the Ministry officials that the continuous payment of the deemed energy is due to breach of agreement with the contractor.
“We have already given them UGX100b and this coming financial year they want us to pay UGX100b. There in four years we will have paid the UGX400b that was spent on the construction of the dam without ever using the power from there,” Tayebwa said.
He added; “these are the financial losses we talk about because UGX300b is going for nothing. The problem is with those who did not build the evacuation line. When the President says we have been wasting money, let him first look at those things”
When contacted after the meeting, Robert Kasande, the Ministry’s Permanent Secretary, declined to comment on the matter saying he was in position to discuss the figures since he was out of office at the time.
Asked whether he would need more time to get back to office in order to revert to this website, Kasande instead referred our reporter to the UETCL Executive Director. However his known telephone contact could not be reached by press time.
About Achwa 2 dam
Achwa 2 Hydroelectric Power Station is located across the Achwa River, in Pader District, Northern Uganda.
The facility is one in a cascade of five power stations set to be developed by the project owner, ARPE Ltd, along Achwa River in Angagura Sub-county, Pader District, boasting of an annual 281 GWh output.
The plant is expected to provide electricity to 35,000 Ugandans and reduce greenhouse gas emissions by more than 109 tonnes annually once it is operational.