Uganda to Borrow $95 Million for Hydro Power Plant in Oil Region

By Nicholas Bariyo

KAMPALA Uganda--Uganda's government plans to borrow a total of $95 million from the French Agency for Development and the Germany Development Bank to finance developing a hydro power plant in the oil-rich Lake Albertine rift basin, the country's information minister said Thursday.

Wednesday the cabinet approved the borrowing to fund the construction of a 44.7 megawatt power plant along river Muzizi in Hoima district, some 290 kilometers west of Kampala, Information Minister Jim Muhwezi said in a statement.

The plant is part of government efforts to ramp up infrastructure development in the region where U.K.-based Tullow Oil PLC (TLW.LN), France's Total SA (TOT) and China's Cnooc Ltd. (CEO) are developing the country's oil fields, estimated to contain as much as 6.5 billion barrels of crude.

"Feasibility studies for Muzizi have been completed and the next phase is construction," Mr. Muhwezi said. "Cabinet therefore approved the government borrowing ...for financing."

Uganda's oil region is located in a remote region along its western border with Congo and lacks infrastructure facilities including modern roads, railways and power plants. Crude pumping is expected to start by around 2018.

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