His Highness the Aga Khan,
Members of Parliament,
chief executives of Bujagali Project Financing Institutions present,
chief executives of Industrial Promotion Services,
Sithe Global and Salini,
Ladies and gentlemen,
I welcome you all to Jinja to witness the laying of the Foundation Stone for Bujagali Hydro-power Project. I wish to extend special welcome to His Highness the Aga Khan and congratulate him on this auspicious occasion of celebrating the 50th anniversary of his ascension to the position of Imam of the Ismaili Muslim Community. I salute all our development partners who have graced this occasion with their presence here in Jinja.
His Highness the Aga Khan has made significant contribution towards the social and economic development of this country. The Aga Khan Foundation for Economic Development's (Akfed) participation in Uganda ranges from manufacturing, finance and banking, the media, social services like education and now infrastructure.
Specifically, in the power sector, Akfed as public- private partnership with Government is operating the West Nile power supply concession under which power supply in the area has been increased from four hours per day to 18 hours per day and also involves the construction of the 3.5 MW Nyagak mini Hydro-power plant, which is expected to be commissioned early next year.
Regarding the Bujagali Hydro-power Project, for which we have laid a foundation stone this morning, Industrial Promotion Services an affiliate of Akfed is leading a consortium called Bujagali Energy Limited, which will be responsible for the development and operation of this project. I understand the Bujagali Project is the largest single infrastructure investment of the Aga Khan Development Network worldwide. I commend His Highness for this remarkable contribution.
Ladies and Gentlemen, the Bujagali Project has been on our books for a long time. The delay in constructing this power plant plunged this country into a power supply deficit which has greatly affected our economy. As part of the solution to address the power supply shortage, emergency thermal power plants have been installed. This has necessitated provision of huge subsidies from Government to buy down the tariff of thermal generated power.
This state of affairs in the power sector has made us re-examine our energy supply strategies to ensure energy supply security. In particular:
(i) An urgent need has been recognised to mobilise internal financial resources to develop power projects. To this end, an Energy Fund has been established with seed money from the budget.
(ii) Diversification of power supply sources beyond the traditional Hydro-power. These sources include; a) the country's vast renewable energy resources like biomass, solar, wind and geothermal, and b) the recently discovered oil and gas resources in the Albertine Graben. Efforts are already underway to develop the oil and gas resources to cater for our short to medium term power requirements.
(iii) A third opportunity is derived from the available power resources within the expanding East African Community and the environs. The strategy is to build grid interconnections so that there is power flow from places of abundance to power deficit areas.
(iv) An urgent need for professional manpower required to develop the available energy resources was recognised. Recruitment of this manpower is already underway.
Proceeds from the Energy Fund have already been put to good use. In July this year, the Government made available $75m towards the Bujagali Project so that work commences giving adequate time to the lenders to put together the required financing for the project. Once the lenders are ready with the financing, this money will be recovered and injected into other power projects. Government has also been able to provide $17.5m out of the Energy Fund to implement the Resettlement Action Plan (RAP) for the Bujagali transmission line.
Let me take this opportunity to express Uganda Government's gratitude to those who have been and are associated with the development of the Bujagali project. Starting with the project sponsors, I wish to thank members of the Bujagali Energy Limited (BEL) consortium, namely Industrial Promotion Services (IPS) of Kenya, one of the conglomerates of the Aga Khan Fund for Economic Development) and Sithe Global of USA, for the commitment shown to the project. I am sure that together with the contractor, Salini, BEL will be able to deliver the project on schedule.
Turning to the financiers, I wish to thank the following: Agence Françoise Developpement (AFD) /Propaco of France; African Development Bank; European Investment Bank; Netherlands Development Finance Company (FMO); International Finance Corporation (IFC); International Development Association (IDA) KfW/DEG of Germany; and the banks under the IDA Partial Risk Guarantee (PRG) namely Barclays/ABSA and Standard Chartered. I thank you all for the effort you have made in putting together the financing. Last, but not least among the financiers, I wish to thank the Ugandan public who, as I indicated above, are building an Energy Fund, part of whose proceeds has been used to implement some components of the Bujagali Project. The contribution from the Energy Fund over and above the $20m Government contribution inherited from the earlier investment made when we started to develop Bujagali project with AES corporation (Bujagali 1), makes this project a true public-private partnership.
I also wish to thank the multi-institutional Government of Uganda team, which participated in the packaging of the Bujagali project for development, right from the time of selection of the new project sponsor, BEL. This team has conducted the process in a professional and transparent manner. I thank them for a job well done.
Let me briefly touch on the issue of the environment as it relates to the Bujagali Project. The environmental aspects of the Bujagali Project have been extensively studied and debated. I wish to assure the public that the Government of Uganda, working with the project sponsor, BEL will ensure that all the identified mitigation measures are satisfactorily implemented.
As I conclude, I wish to bring to the forefront the investment opportunities in Uganda in the energy and mineral sectors as well as the associated industries. In the petroleum sub-sector, the oil and gas discoveries made in the Albertine Graben are opening up significant opportunities. These include the value addition industries like refining and gas processing together with their attendant service industries.
In the mineral sector we are currently conducting an extensive airborne geophysical survey of the country, which will bring out key mineral targets which would not easily be spotted by conventional mineral exploration means. As results come out, investors both local and foreign should come up and take up the investment opportunities in this emerging mineral sector.
Once again, I congratulate His Highness on this 50th anniversary and wish him many more years. I look forward to a timely commissioning of the Bujagali project.