Just weeks after Red Pepper had reported that works at the Karuma dam are being affected by limited funding and shortage of skilled workers, Li Ruogu the Chairman and President of Exim Bank of China has revealed that the bank is willing to extend funding to the expansive dam project.
He says that, more details to the funding will be availed after meeting with President Museveni where part of the discussions the two leaders are to hold will be centered on details of financing the project. Ruogu’s visit is part of the ongoing discussions of financing arrangements and they are expected to be completed by 2018.
Liu Jianguo, the Deputy Project Manager, Sino Hydro Corporation the Chinese Company that won the contract to construct the dam during a media tour to cross check on the level of works at the dam noted that though the company has registered some progress at the station, the untimely and inconsistent way funds are trickling in for the project is on a great percentage affecting works.
He explained that, “So far, we have received about 15% of the required funds from China Export and Import Bank (EXIM Bank), the money has been used to purchase some of the needed construction equipments, securing local sub-contractors who are to carry out the geo-surveys and the actual works which started immediately after the signing of the contract in August.”
It is believed that the 600MW project is estimated to cost USD 1.4bn that is about Shs 3.5trillion for the dam while an additional Shs 700 billion is to be spent on the installation of transmission lines.
The major funding of the project is a concession loan from Exim Bank of China that accounts for 85% of the funding while Uganda government will provide 15% of the funding.
He however noted that these funds are not sufficient and yet these are crucial at recruiting staff for the project. This he says, is the reason why signing contact with subcontractors has been delayed although he says, this is likely to take place in May.
Additional reporting by Prisca Wanyenya