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Uganda

Did You Know?

In addition to having numerous ECAs involved in African development projects, African nations are creating their own export credit agencies to facilitate both exports and imports. The resource-rich East African country of Uganda is a member of the African Export-Import Bank and a founding member of the African Trade Insurance Agency, which began operations in 2001. Uganda was also the first African country to qualify for debt relief under the IMF and World Bank's Heavily Indebted Poor Countries Initiative (HIPC) in 1998. Still, it struggles under a heavy debt burden, and ECA-supported projects such as the Bujagali dam present a tempting opportunity for income, even at the expense of human rights and the environment.

"Uganda is one of the world’s poorest countries, and its poverty is a key reason why less than 5% of the population has access to electricity. A World Bank study states, 'No more than 7% of the total population [in Uganda] can afford unsubsidized electricity... It is unrealistic to think that more than a fraction of the rural population could be reached by a conventional, extend–the–grid approach. A more promising course is to rely instead on alternative, non–conventional approaches to electrification.'" -Uganda’s Bujagali Dam: A Case Study in Corporate Welfare By Lori Pottinger, International Rivers Network September 2000

Bujagali Falls Photo Credit:International Rivers Network

* Important Background Documents on Uganda
* Bujagali Dam Project Summary
* News Items 2004-2005

Important Background Documents:

NAPE, Environmental Advocacy, and the Bujagali Power Project, Uganda 2003 Alfred Tusanyuke Balinda of the National Association of Professional Environmentalists of Uganda summarizes their legal actions, based on the inadequate EIA, against AES, the World Bank, the IFC, and eventually the Ugandan Government, in which they won a case requiring more transparency in the project.

Opinion: Test Case Bujagali 2002 Peter Bosshard of the International Rivers Network discusses why, although the World Bank and the African Development Bank approved USD $230M backing for the venture in 2001, many ECAs such as Sweden's EKN have since backed out of the project.

Magic on the Nile to Disappear? 2002 Prof. David Simon, University of London, gives a brief geographical and historical context to the decision to construct the dam.

Bujagali Dam Project Summary:

A hippo enjoys the Nile

One of the largest projects with ECA involvement in Uganda is the Bujagali Hydropower Project, a dam whose site is 2.5 km below one of the world’s most magnificent waterfalls, some 10 km from the source of the River Nile. The Ugandan Government contracted AES Nile Power to construct a 250 MW hydropower dam. Construction began in January 2003, but AES announced in August 2003 that it was abandoning the project. In July 2005, three companies signed on to take AES’s place in the project. Industrial Promotion Services (IPS) Kenya Ltd, Sithe Global Power, and Nederlandse financierings-Maatschappij Voor Ontwikkelingslanden N. V (FMO) wil begin construction on the dam in June 2006. Financing for the bank will come from the European Investment Bank, International Finance Corporation and the Africa Development Bank.

The project stands to increase Uganda’s debt burden, adversely affect the lives of thousands of displaced people and cause serious environmental damage. If completed, the power it generates will do nothing to help the 97% of Uganda’s population who are not connected to the national grid. The project’s funders include the World Bank and the African Development Bank. The following ECAs have also offered funding: ERG (Switzerland), GIEK (Norway), SACE (Italy) and FINNVERA (Finland). EKN (Sweden) withdrew support in 2002 based on the belief it was too large a project for Uganda's economy. For further information on ECA-backed dams, see also the ECA Watch page: Problems: Large Dams.

Useful links:

The Bank Info Center's page on the Bujagali Dam

IRN's page on the Bujagali Dam

News 2004-2005:

New African Multilateral ECA Seeks Business (subscription to press service required) - July 27, 2004, The Nation (Nairobi). The Nairobi-based African Trade Insurance Agency (ATI) is Africa's only ECA pioneered by the regional trade bloc Comesa and financed at inception with USD $105M seed money by the World Bank, and it is now aggressively promoting its export insurance. ATI aims to reduce the risk-perception of the region's business environment. There are now 11 member states of ATI: the seven founding states (Kenya , Rwanda , Burundi , Malawi , Tanzania , Uganda and Zambia ) plus Eritrea, Madagascar , Djibouti , and the Democratic Republic of Congo.

For more information, contact the ECA Watch Facilitator.

ECA Watch Campaign Member Links:

International Rivers Network - www.irn.org