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Gov’t fails to utilise UGX 4 trillion loan for electricty projects


FILE PHOTO: Electricity export lines

Kampala, Uganda | THE INDEPENDENT | Government is yet to utilize over 4 trillion shillings meant for electricity projects throughout the country.

According to the loan performance report of the Ministry of Energy and Minerals Development on loans under the sector, presented before the National Economy Committee in Parliament, some of the loans to the government have not been put to use due to termination of contracts as a result of bankruptcy of contractors, lack of counterpart funding and compensation issues.

Others are; lack of contractors on board and court injunctions among others affecting the projects.

According to the status report, out of the 80 million USD from the Islamic Development Bank for construction of Opuyo-Moroto Electricity transmission line 60 million USD hasn’t been put to use for a project that was supposed to begin in 2013 and end in 2019.

MPs of the committee led by Lawrence Bategeka questioned how the Ministry will disburse and use the remaining 60 million dollars, despite having disbursed only 20 million dollars in a space of 7 years.

They were meeting officials from the Energy Ministry, Uganda Electricity Transmission Company Limited (UETCL) and Electricity Regulatory Authority (ERA). The Energy sector has also not disbursed 190 million dollars of 789 million dollars, a loan from the Exim Bank of China effected in 2015 for the 600MW Karuma Hydro Power Project and associated transmission lines.

Government is also yet to disburse 70 million of 83 for a 2015 loan from Islamic Development Bank for Kabale transmission line and distribution project 132 KW which is supposed to end in 2021.

50 Million dollars meant for the grid expansion and reinforcement project for Lira, Gulu, Nebbi, to Arua transmission is yet to be utilized.

Others are 122 million dollars loan of 2018 from the Japanese International Cooperation Agency (JICA) for the Kampala Metropolitan transmission system improvement project ending 2021.

Also 38 million dollars’ loan from German Development Bank (KFW) for Masaka- Mbarara transmission project 35m euro which was supposed to start in 2018.

Another 44-million-dollar loan for the Muzizi Hyrdo Power project due to end 2021.

Herbert Edmund Ariko the MP Soroti Municipality questioned how Government intends to disburse the remaining money in the short project lifespan.

Kasilo County MP Elijah Okupa tasked the Government through the Ministry of Energy to return with a clear statement on how the delay in disbursing the loan money will affect Ugandans.

Simon D’Ujanga, the Minister of State for Energy says they are working hard to disburse the funds in a transparent manner.

He says they have learnt from the past experience and will provide Parliament with the strategy on the loans.

Stephen Kyeganwa, the UETCL Assistant Manager Planning and investment says that the company is also facing challenges due to the long process in getting consultants, procurement processes and resettling project affected persons among others.



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