China injects $500m into Ugandan hydropower dam

19 June 2013

Construction of Uganda’s biggest hydro-electric dam could begin by the end of this year after China decided to extend $500m in credit for the project.

The Karuma dam on the White Nile tributary will have a capacity of 600MW and should be completed within five years, according to a ministry of finance budget document shown to Reuters earlier this month.

Uganda’s government will contribute $700m to the delayed $2bn project and hopes that the remaining funds will come from other development agencies.

Electricity is scarce in landlocked Uganda and the government hopes that Karuma dam, together with the recently-commissioned 250MW Bujagali dam, would generate enough cheap power to meet the country’s rising energy needs.

With crude oil production anticipated to start in 2017, according to Reuters, Uganda’s economy is thought to be set for high growth.

The Karuma Falls on the Nile could help with Uganda’s electricity scarcity (Credit: Sarahemcc/Wikimedia)

China’s funding of the Karuma dam is yet another example of an increasing Chinese footprint in sub-Saharan Africa. The country has also expressed interest in the 40,000MW Grand Inga dam.

Meanwhile Ethiopia’s plans to dam the Nile’s other main tributary, the Blue Nile, for a huge hydropower project have provoked anger in Egypt.

Ethiopia’s 6,000MW Grand Renaissance dam, estimated to cost more than $4.3bn, will be Africa’s largest hydropower plant when complete. The Ethiopian government said that it was 20% complete in April.

Egyptian authorities have protested against its construction after water experts claimed it would drastically lower the level of the Nile, which supplies almost all of Egypt’s water.

Earlier this month Egyptian president Mohamed Morsi promised to "defend each drop of Nile water with our blood".

But a spokesman for the Ethiopian prime minister told the Guardian newspaper that Morsi’s threat was irresponsible and that the project would proceed as planned.

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