Monday, December 17, 2007

Power for the Mapuches but not for Uganda- Norwegian Government owner, SN Power, pulls out of Uganda hydroelectric venture citing economic unviability

SN Power pulls out of unviable Uganda power projects

Norwegian multinational hydropower developer and operator Statkraft Norfund Power Invest AS (SN Power) is pulling out of four mini-hydropower dam projects in western Uganda.

Though the pullout is on the grounds of the project’s financial viability, SN Power is selling its license to another Norwegian power firm.

SN Power announced in December 2004 that it would make Uganda its entry point for Africa in the energy sector. The government had hoped its entry would help improve Uganda’s ailing energy sector when it began generation of 43.5 Megawatts of power in six districts in western Uganda.

The company said it decided to withdraw from the projects in August this year because they were deemed financially unviable.

“SN Power gave up the Muzizi and Nengo Bridge licence rights because we realised the projects would be not be commercially viable,” said Marte Lerberg Kopstad SN Power’s external relations manager.

“The Waki and Bugoye projects were developed to the point of investment decision, but SN Power decided not to go further as they did not fit our corporate strategy and the commercial viability was not strong enough.”

Mr Kopstad told The EastAfrican that SN power had decided to sell its rights to Norwegian power company Troenderenergi. This will now mean that residents of western Uganda will have to put up with irregular or no power supplies longer than the 24-month construction period.


Energy Commissioner Paul Mubiru however said the pullout does not spell doom for the western districts as Troenderenergi is already preparing to continue with construction work at these sites.

The relatively small hydropower stations are expected to cost between $50 million and $60 million.

The Norwegian government, with some 100 years of experience in developing hydropower, owns SN Power. The company, licensed in November 2004 by the Electricity Regulatory Authority (ERA), was expected to demonstrate its expertise on four sites in western Uganda.


About five per cent of Uganda’s population has access to electricity, and the 250MW Bujagali hydropower project under construction and eight other mini-hydropower projects are expected to expand production to another 15 per cent of the population and attract more industries to a country where domestic usage accounts for 70 per cent of power consumption.

(Read about what Norway's SN Power intends for Chile's indigenous Mapuche people: Mapuche Protest against Norwegian Hydroelectric Power , Norwegian Power Projects in Mapuche, Chile Heartland Plunder Environment )

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