UGANDA – The Ugandan government has officially commissioned the Karuma Hydropower Project (KHP), a 600 MW hydropower plant on the River Nile. This marks it as the country’s largest power generation facility to date.
Sinohydro Corporation, a Chinese hydropower company, constructed the US$1.7 billion project and fully funded it from China.
The majority of funding came through a US$1.4 billion loan from China’s Exim Bank, while the Chinese government covered the remaining costs.
With the launch of this project, Uganda’s total electricity generation capacity will rise to over 2 GW. Alongside the power plant, a 248 km, 400 kV transmission line has been installed to distribute electricity generated from the facility
Additionally, a US$180 million transmission line is under construction to export power from Uganda to South Sudan.
Chinese Ambassador to Uganda, Zhang Lizhong, lauded the project as a “flagship of China-Uganda cooperation,” emphasizing that it will provide clean, affordable energy for Uganda and neighbouring countries such as Rwanda, Tanzania, and Kenya, where Uganda exports electricity.
According to Uganda’s Energy Minister, Ruth Nankabirwa, construction of KHP began in 2013 but faced multiple delays due to logistical challenges and the impact of the COVID-19 pandemic.
This project follows the 2019 completion of the 188 MW Isimba Hydropower Dam, also funded by China and located on the River Nile.
As of 2023, hydropower accounted for 91.27% of Uganda’s electricity generation, according to GlobalData.
Economic and infrastructure impact
The commissioning of Karuma is part of Uganda’s broader strategy to make energy more accessible and affordable.
President Yoweri Museveni has emphasized that access to low-cost energy is vital for stimulating economic growth and attracting foreign investment.
With increased electricity capacity and lower energy costs, Uganda hopes to support its growing industrialization, particularly in manufacturing and extractive industries.
Developing high-voltage transmission lines is also crucial to ensuring efficient power distribution. These investments are expected to reduce electricity losses, a persistent issue that has impacted the profitability of power plants.
By upgrading its electricity infrastructure, Uganda aims to stabilize its national grid while meeting the region’s energy demands.
Outlook for Uganda’s energy future
The increased generation capacity from KHP positions Uganda as a key regional energy supplier. However, challenges such as infrastructure maintenance and managing debt repayments, especially in China, remain.
Ensuring the sustainability of these investments will depend on stable regional electricity markets and the country’s ability to repay long-term loans.
Uganda’s growing energy capacity is expected to attract further investment in sectors such as mining and services, ultimately strengthening its regional and economic standing as electricity demand continues to rise across Africa.
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