Uganda's Karuma dam costs escalate to $2.2 bln
In September Energy Minister Hilary Onek told Reuters the cost of the plant, situated on the Nile River, was estimated at $900 million.
"We have just completed a feasibility study and it says $2.2 billion," John Mugyenzi, managing director of Uganda Electricity Generation Company, told reporters on the sidelines of an African power conference.
"We expect construction to start late this year, early next year with first power within five years," Mugyenzi said.
He said the government may consider tapping international foreign bond markets to help fund construction costs.
East Africa's third-largest economy has enjoyed a decade of strong growth, but a chronic power shortage coupled with rising costs has hamstrung expansion of its manufacturing sector.
Mugyenzi said the 250 MW Bujagali hydro plant, slated to produce its first power later this year, would help reduce Uganda's reliance on thermal power plants.
However, even when Bujagali, which has been planned for almost two decades, starts generating electricity it will not be sufficient to curtail energy shortfalls.
"The additional capacity we expect from Bujagali is 150 MW on line by April 2012, so basically we shall have a shortfall of about 10 to 50 megawatts," Mugyenzi said.
Uganda has an average power shortfall of 160 MW at any given moment, Mugyenzi said.
He added that he did not see electricity prices increasing over the short-to-medium term, mainly as a result of the hydropower plants but also as the country moved to become an oil exporter from its current oil importer status.
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