The Minister of Energy and Mineral Development, Ruth Nankabirwa, has expressed frustration over delays in the Ayago Hydropower Project and warned that the government may seek another investor if progress continues to be slow.
The Ayago Hydropower Project, which is expected to generate 840 megawatts, was awarded to Bridging Foundation, which pledged a $5 billion investment, split between $2.5 billion for energy and $2.5 billion for other sectors.
“We granted them 365 days with specific conditions, and I am not satisfied with the speed at which Bridging Foundation is progressing,” Nankabirwa said.
“As a result, I have informed the President to consider seeking another investor,"she added.
These remarks were made shortly after the 14th Annual General Meeting of the Uganda Electricity Generation Company Limited (UEGCL) in Kampala, where the company reported a net profit of Shs 54.28 billion for the 2023/2024 financial year, marking a 60% increase in profit after tax.
The Ayago project, with its planned capacity of 840 MW, is the most ambitious of the country’s energy projects, positioning itself as a cornerstone of the national energy strategy.
Located on the Nile, the project aims to provide a sustainable energy source to support the country's economic growth.
In addition, Nankabirwa revealed government plans to boost power consumption and increase investment in new energy projects, including the development of the 392-megawatt Oriang Dam and the exploration of geothermal and nuclear energy.
She also shared the government's commitment to expanding electricity generation from diverse sources, noting that feasibility studies for solar power projects are underway, including a 150-megawatt plant in Buliisa and a 100-megawatt project in Masindi.
Furthermore, geothermal exploration has identified a potential capacity of 1,500 megawatts, with increasing private sector interest.
On nuclear energy, Nankabirwa confirmed that a site in Buyende District has been identified, and if all conditions including compensation for affected communities and government support are met, Uganda could generate 1,000 megawatts of nuclear power by 2031.
In her speech, Nankabirwa also stressed the economic potential of Uganda’s growing energy sector, emphasizing the need to tap into opportunities such as data centers, which consume significant power but generate high revenue.
Despite the challenges, Nankabirwa expressed optimism, stating that Uganda’s energy sector is on the right track and urged stakeholders to support the continued development of power generation, infrastructure, and revenue growth.
Finance Minister Matia Kasaija reaffirmed that the government remains the dominant player in the electricity sector, overseeing generation, transmission, and distribution, with the private sector playing a supportive role.
Kasaija dismissed claims that private companies drive the sector, asserting that the government’s efforts outweigh the contributions of the private sector.
He also emphasized that Uganda cannot rely solely on private investment to supply power, given electricity's critical role in economic development.
“We encourage private sector involvement, but in some cases, we also provide financial support to them,” Kasaija said, reinforcing the government's policy of maintaining control over the power sector while allowing private participation to supplement state efforts.
Dr. Eng. Harrison Mutikanga, CEO of UEGCL, addressed ongoing challenges at the Namanve Power Plant, which has been operational since 2008.
He acknowledged that insufficient funding for maintenance has affected operations, but assured stakeholders that UEGCL is working closely with shareholders to address these issues.