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Uganda Thermal Plants Resume Generation, Deficit Eases – Minister Says

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Posted July 13, 2011 by Ugandan Diaspora News Team in Business ~ 1,490 views

     

By Nicholas Bariyo ~ KAMPALA -(Dow Jones) ~ Independent power producers have agreed to resume emergency power generation in Uganda following an agreement with the government over unpaid generation fees, Energy and Minerals Minister Irene Muloni said Tuesday.

At least two diesel-fired thermal plants resumed operations Tuesday after the government assured the owners of payment of at least 300 billion Uganda shillings or $118 million in arrears, she told reporters late Tuesday.

Independent power producers in the country include London-listed Aggreko PLC (AGK.LN), Ugandan power producer Electro-Maxx and Norway-based Jacobsen Elektro.

Two plants have resumed generation but the 50-megawatt Kiira thermal plant is still closed as the government doesn’t plan to renew the contract, which expired at the end of June, Muloni said.

Uganda’s parliament has approved the payment of arrears by the energy ministry.

Lawmakers had declined to clear the payment on two previous occasions, demanding accountability for the funds received by the ministry earlier this year.

Last week, Uganda’s power distribution company, known as UMEME, started power cuts for up to 18 hours a day after the thermal plants shut due to unpaid fees. The country has since been facing a deficit of at least 120 MW.

Uganda contracted independent power generators in 2006 in a bid to mitigate the effects of power shortages caused by lower water levels at the country’s main hydropower stations following a long drought.

Most of the power generated by the plants is supplied to the country’s primary processing industries, dealing in raw commodities such as coffee, cocoa, tea, fish and horticultural products.

Later this year, some of Uganda’s thermal power plants are expected to start using heavy oils produced during the extended well testing exercise in the oil-rich Lake Albertine rift basin.

Uganda has discovered at least 1 billion barrels of oil reserves in the basin and is expected to become an oil producer in the next few years.

 

Nicholas Bariyo: 256-75-2624615; bariyonic@yahoo.co.uk
Article Source: http://www.foxbusiness.com


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Ugandan Diaspora News Team

Ugandan Diaspora News Online is an independent, non political news portal primarily aimed at serving Ugandans who work and reside outside Uganda. Our aim is to be a one stop shop for everything Ugandan and the celebration of our Ugandan heritage.

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