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Karuma To Provide Cheap Power - Minister

State minister for energy Simon D’Ujanga has said that Karuma power will significantly lower the final power tariff insisting that the power from the dam will be cheap.

State minister for energy Simon D’Ujanga has said that Karuma power will significantly lower the final power tariff insisting that the power from the dam will be cheap.

D’Ujanga says Karuma power will be at 5-6 cents which is three times cheaper than Bujagali power which ranges from 12-16 cents.

The minister said when Bujagali was commissioned that its power was expensive because the loan which was used to construct the dam was factored into the tariff. While Karuma is also being constructed with a loan from the Chinese government, D’Ujanga says paying back the loan will not impact significantly on the tariff adding that Karuma is being constructed under a completely different arrangement.

He says the loan for the construction of Karuma is a soft one which will be paid back at an interest rate of not more than one percent, adding that Karuma is a public project which will be owned and managed by the government not like Bujagali which was constructed under a private-public partnership.

The Electricity Regulatory Authority—ERA also says that Karuma dam will bring down the weighted average cost of electricity saying that the cheap Karuma will outweigh the current expensive power sources. ERA spokeperson John Julius Wandera told Uganda Radio Network that the output of Karuma in terms of quantity is what will make a huge difference because of the merit dispatch rule.

Wandera explains that the merit dispatch rule is where the sources of power are dispatched in the order of their cost. He says in this case the cheap Karuma will be dispatched first, followed by Eskom, and then Bujagali until the demand is met.

Karuma will be constructed by Chinese company Synohydro at 1.39 billion dollars.

 

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