Energy & Mining

Bujagali Hydropower audit: Furious MPs kick minister out of parliament

KAMPALA – The State Minister for Energy Sidronius Opolot alongside other officials were yesterday sent away from parliament by the legislators on the Parliamentary Adhoc Committee investigating the financials of Bujagali Energy Limited [BEL], a company running Bujagali Hydropower project.

Minister Opolot and his officials were accused of not coming with relevant documents regarding the agreement that BEL signed with the government for the implementation of the hydropower project.

The minister and his officials were expected to provide the committee with relevant documents concerning the shareholding agreement between government and BEL, implementation agreement, power purchasing agreement, and liquidity documents.

In 2004, government procured BEL through a competitive tender process to undertake the development of the 250MW Bujagali Hydro Electric Power project.

The License issued by Electricity Regulatory Authority [ERA] for generation and sale of electricity, and the power purchase agreement signed between Bujagali Energy limited [BEL] and Uganda Electricity Transmission Company Limited [UETCL] require the payment of the Internal Rate of Return [net of Corporate Income Taxes payable by BEL to GOU] the on equity invested in the power project through a component of the Capacity price.

In the agreements, the capacity price payable to BEL is recoverable through the end-user tariffs.

The government of Uganda represented by the Ministry of Energy and Mineral Development entered into an implementation Agreement with Bujagali Energy limited under a Public Private Partnership [PPP] dated December 6, 2007, to develop, construct, own and operate a clean energy hydroelectric power production facility. The agreements also dictated management and construction of a high voltage transmission line to evacuate electricity from the facility.

The Committee formed in May this year and chaired by Sheema North Legislator Dickson Kateshumbwa was furious after the team led by minister Opolot failed to provide substantive documentation regarding the same.

Budadiri West MP, Nathan Nandala Mafabi, and Kashongi County MP, Herbert Tayebwa insisted that the minister and his entire team were so unfair by failing to give an explanation about the unclear areas in the deal and the progress of the entire project.

The committee learned that the said BEL signed agreements in 2005 yet it was incorporated in 2007.

Previously parliament directed investigations after finding irregularities among which was granting BEL a 5- year tax holiday which MPs contested, proposing a one-year tax holiday instead.

The company has been pushing for its tax exemptions to be extended to 2027.

The other committee members investigating BEL are; MPs Paul Omara [IND, Otuke], Karim Masaba [IND, Mbale Industrial Division East], and Loy Katali [NUP, Jinja District Woman]

Also on the committee are; Faith Nakut [NRM, Napak District Woman], Esther Afoyochan [NRM, Zombo District Woman] and Muhammad Kivumbi [NUP, Butambala].

Shareholders in BEL are: Government of Uganda [10 percent), Jubillee Insurance Company [18.24 percent], Scatic [55.45 percent and Aga Khan Fund for Economic Development [16.31 percent].

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