The planned construction of Muzizi Hydro power Project is soon taking off following an agreement signed between the government of Uganda and funding partners; German development bank (KfW) and French Development Agency (AFD). KfW will provide a concessional loan of € 40 million (US$42.4million) and a grant of € 5 million (US$5.3million) while AFD will contribute a concessional loan of €45 million (US$ 47.7million).
The Ugandan government will contribute an equity contribution of about € 20 million (US$21.2million) to ensure full financing of the project, whose total cost is estimated at € 110 million (US$116.5million).
The Muzizi project is located along River Muzizi about 6km upstream of Lake Albert on the south-eastern side in the District of Kibaale. The project foot print, however, extend to Kabarole, Kyenjojo and Ntoroko districts in the western region.
The Project with a capacity of 45 megawatts is expected to increase the current power generation capacity in Uganda by about 5% upon completion, benefiting about one million people.
Finance Minister Matia Kasaija, who signed the agreements on behalf of government, said that Muzizi project will help Uganda in achieving aspirations of the National Development Plan – NDP II of attaining 2,500 megawatts of installed electricity generation capacity by 2020.
France’s Ambassador to Uganda Stephanie Rivoal, said their support is to meet energy needs of Ugandans through hydro power and discourage bad practices like deforestation which have effects on climate change.