The proposed Karuma Dam in Uganda
which is envisioned to be the biggest dam in Uganda producing upto 600MW of electricity
may soon have the Chinese Government backing it as a financier.
This is following frustration by
H.E. President Yoweri Museveni with his Ministry of Energy officials, due to
the delay in procuring of an EPC(Engineering, Procurement & Construction)
partner for the proposed hydropower dam.
Last week, 28th March,
2013 The President took control of the project and boarded a plane for the
BRICS summit in Durban, South Africa, where he presented it to the Chinese
President Xi JinPing as one of his priority projects.
In addition to seeking funding he
also requested the Chinese delegation to seek a credible contractor after two
Chinese firms that were being eyed as potential EPC partners for the project were
found to be wanting in terms of the information they presented to qualify for
the project. All over Africa there have been instances where Chinese companies
put the Chinese government and its people in bad light by being overly greedy
and unorthodox in the sourcing and implementation of projects. This is
something the Chinese government has to reign in to redeem its country’s image
even as it offers over USD20billion annually in unconditional loans to African
countries for major infrastructural projects.
Uganda is seeking funding for the
project after several key western donors withdrew their backing for the country’s
budget. This necessitated the US$ 600M that was to be made available for the
project to be redirected to the government's recurrent budget. As western
governments and institutions back down due to economic slowdown in their
economies and ethical & moral stands, the BRICS(Brazil, Russia, India,
China and now South Africa) especially China are seen as an alternative to fill
the gap as financiers in less strings attached financing arrangements.
Reports from the Summit suggest that Chinese government agreed to fund the project through the Exim Bank of China.
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