Virginia-based AES Corporation — the world’s largest private power company — plans to build and operate a 200-megawatt dam at Bujagali rapids, provided it can secure insurance and loans from the World Bank and other international financiers.

 

If completed, the dam will destroy a spectacular stretch of cascading rapids just below Lake Victoria — a spiritual site for Uganda’s 2.5 million-strong minority Busoga, who believe their tribe’s spirits reside in the churning waters. The dam’s reservoir will displace 820 residents, drown some of the country’s best farmland, and spread waterborne diseases.

AES is expecting a US$85 million loan plus a US$70 million “partial-risk guarantee” from the World Bank which would insure AES against non-payment by the Ugandan state utility. AES is also expecting to receive funds from the African Development Bank, export credit agencies, and commercial banks.

 

AES has signed a 30-year power purchase agreement with Uganda’s state-owned electric utility, which obliges the utility to pay AES for Bujagali power even though the power is too expensive for most Ugandans. In order for Uganda’s electric utility to pay for AES power, the World Bank has demanded that the Ugandan government raise electricity rates by at least 70 percent. Meanwhile, Ugandans are demanding access to cheaper generating technologies — such as micro-turbines, solar panels, and fuel cells — that don’t require costly extensions of the national grid and could deliver more reliable and affordable service to rural areas. An estimated 95 percent of Ugandans are not connected to the national grid, nor could they afford grid-based electricity at current prices, according to activist Martin Musumba of the Save Bujagali Crusade.

 

Allegations of corruption have long-plagued the US$500 million project. Former minister for energy and mines, Richard Kaijuka, was forced to resign over allegations he had demanded a US$500,000 bribe from AES officials and pocketed US$240,000. Mr.Kaijuka now serves as the World Bank’s Executive Director for Sub-Saharan Africa.

AES claims to have consulted exhaustively with Ugandans, including Jaja Bujagali, the chief priest and spirit medium who is the Busoga’s communicator with the spirits of the Bujagali rapids.

 

AES claims that Jaja Bujagali agreed to a “relocation” of the river’s spirits at a public hearing, a claim Jaja denies. “If they want to relocate [spirits] to another place, will they carry the whole river or falls to that place? They think that a [spirit] is like a goat that can be transferred from place to place?”

 

Without insurance from the World Bank, neither AES nor commercial financiers would invest in the dam. Several European lenders have already declined to fund or give guarantees for the project. Proparco, a French aid agency declined to fund the project because of unresolved allegations of corruption, and the German Development Bank refused to fund the project due to “unanswered environmental concerns.” Britain’s Export Credits Guarantee Department shunned the project due to “unacceptable financial risk arising from the Ugandan power sector,” and the Swedish International Development Cooperation Agency declared the Bujagali project “unfeasible.”

What you can do. . .

Please support Ugandans in their struggle to save the Bujagali rapids by writing to Canada’s Finance Minister and Governor to the World Bank, Paul Martin, and to your member of Parliament. Urge them to vote “no” to World Bank support for the Bujagali dam. Tell them you object to the World Bank teaming up with a multinational power company to destroy Uganda’s national treasure and drive up electricity rates. If you can, please send us a copy of your letter and any responses that you receive.

The Hon. Paul Martin M.P.
Room 515-S, Centre Block, House of Commons, Ottawa, Ontario, K1A 0A6
E-mail: Martin.P@parl.gc.ca

Photo credit: Adrift White Water Rafting, Uganda