Uganda and the Democratic Republic of Congo are undertaking a feasibility study for the construction of an electricity transmission line from Kasese to Bunia.
The feasibility study is expected to be concluded by March 2023, according to our sources, with an inception report already done.
The transmission line is meant for Uganda to export excess power from the Nkenda substation in Kasese to eastern DR Congo as the two countries look to deepen trade across the border. Eastern DR Congo heavily depends on the more expensive generators and small solar grids to light up premises.
The feasibility study will, among other things, reveal the design of the transmission line and financial cost. It is estimated that the transmission line might cost up to $200 million.
Our sources say they are looking to international sources of finance, especially the United Kingdom, to borrow the funds for the project. The local capital markets are said to be exhausted with immense demands.
Experts say it usually takes nine months after the completion of the feasibility study to shore up the funds. Therefore, construction of the transmission line is expected to start at the end of 2023.
Also, parallel negotiations for a bilateral agreement as a legal document for the project are already underway, our sources told us. Uganda and DR Congo recently signed a memorandum of understanding to facilitate the negotiations over the bilateral agreement to take place.
Among the most contentious issues that could dominate the negotiations is the issue around the manner in which the tariff will be set for the capital investment to be recouped.
At the signing of the MoU, a consortium of companies was revealed as the implementer of the transmission project. Elecnor, Sevicious Y Proyetos and Dott Services Limited form the consortium that also has the responsibility of sourcing the money on behalf of the two governments. However, it is no guarantee that this consortium will construct the transmission line.
Source: The Observer