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Bujagali Energy Ltd.
Environmental & Social Review Summary

This Environmental and Social Review Summary is prepared and distributed in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board of Director’s decision. Board dates are estimates only.
Any documentation which is attached to this Environmental and Social Review Summary has been prepared by the project sponsor and authorization has been given for public release. IFC has reviewed this documentation and considers that it is of adequate quality to be released to the public but does not endorse the content.
Project number 24408
Country
Uganda
RegionSub-Saharan Africa
SectorLarge Hydro - Renewable Energy Generation
Department
Company nameBujagali Energy Limited
Environmental category:A
StatusActive
Date ESRS disclosedDecember 20, 2006
Previous EventsInvested: January 22, 2008
Signed: June 27, 2007
Approved: April 26, 2007
View Summary of Proposed Investment (SPI), click here

OverviewCategory &

Applicable Standards
Key Issues

& Mitigation
Community/

Engagements
Availability

of Full

Documentation

Overview of IFC's scope of review
IFC conducted its social and environmental review of the Bujagali Hydropower Project jointly with members of the World Bank Group (WBG) and other senior lenders. The review consisted of appraising technical, social development, environmental, and occupational health and safety information submitted by the Project Sponsors, together with analysis and site visits by lenders’ social and environmental specialists and specialist consultants to IFC and the WBG. Key documents reviewed include the following:

>>Bujagali Hydropower Project, Uganda; Social and Environmental Assessment; Terms of Reference, prepared for BEL by R.J. Burnside International Limited; June 2006

>>Bujagali Hydropower Project, Uganda; Social and Environmental Assessment; prepared for BEL by R.J. Burnside International Limited; December 2006

>>Bujagali Interconnection Project, Uganda; Social and Environmental Assessment; Terms of Reference, prepared for UETCL by R.J. Burnside International Limited; June 2006

>> Bujagali Interconnection Project, Uganda; Social and Environmental Assessment; prepared for UETCL by R.J. Burnside International Limited; December 2006

>> Bujagali II – Economic and Financial Evaluation Study; Draft Final Report; prepared for International Finance Corporation by Power Planning Associates, December 2006

>> Strategic/Sectoral, Social and Environmental Assessment of Power Development Options in The Nile Equatorial Lakes Region; Stage II; Revised Final Report; prepared by SNC-Lavalin International; November 2005

>> Bujagali Hydropower Project EIA (7 vols.); prepared for AESNP by ESG International and WS Atkins; March 2001

The project involves an appraisal, with new project sponsors, selected through an international competitive bidding process, of a hydroelectric project that was reviewed from 1998 through to the fall of 2003, at which point the then proponent, AES Nile Power (AESNP), decided not to carry it forward. The proponent had completed detailed social and environmental documentation, disclosed by IFC in March 2001, the majority of the public consultations and disclosure, and resettlement at the project site. The project is substantially similar and updated from the one previously appraised by IFC; the contractor to be selected by the project sponsors is expected to make design and construction modifications to the project.

The project sponsors have prepared a new comprehensive Social and Environmental Assessment (SEA) to address changes to the design and to the baseline environment in the affected areas, and have conducted additional formal and informal consultations in Uganda regarding the new circumstances of the project. WBG staff has maintained contact with the project in the period since 2003, and participated in consultations. IFC staff visited the project site in March 2006 and reviewed iterations of the SEA in March, September, and November 2006.
Project description
Bujagali Energy Limited (BEL or the company) is to develop, construct and maintain an up to 250 MW run-of-the-river power plant on a Build-Own-Operate-Transfer basis on the River Nile, at Dumbbell Island, 8 kilometers north of the existing Nalubaale and Kiira power plants, in Uganda. The company will also design and manage the construction of a 100 kilometer 132 kV transmission line (insulated for 220kV to allow for future expansions) (the Interconnection Project) on behalf of the Uganda Electricity Transmission company Ltd. (UETCL), Uganda’s national transmission company, to strengthen the evacuation of electricity from the project. The project will be an Independent Power project (IPP) and will sell electricity to UETCL under a 30-year Power Purchase Agreement (PPA), which was signed on December 13, 2005. BEL’s headquarters are in Kampala, Uganda.

The project sponsors are Industrial Promotion Services (Kenya) Ltd. (IPS(K)) and SG Bujagali Holdings, Ltd., an affiliate of Sithe Global Power LLC (US) (Sithe Global). The project will be built under an Engineering, Procurement, Construction (EPC) contract issued by BEL; the O&M operator of the plant is expected to be an affiliate company of Sithe Global. UETCL will award the Interconnection Project EPC contract, and own, operate, and maintain the transmission facilities. UETCL will contract BEL to play a management role in the design, procurement, and construction phases of the Interconnection Project.

The hydropower facility will consist of a power station housing up to 5 X 50 MW turbine generators within a 28 m high earth-filled dam and spillway works. The project will require 125 ha of permanent land take and 113 ha of temporary land take for the project’s ancillary facilities. The dam will impound a reservoir extending back to the tailrace area of the Nalubaale and Kiira facilities, inundating Bujagali Falls. The reservoir will be 388 ha (3.88 km2) in surface area, comprising the existing 308 ha of the Victoria Nile, and 80 ha of newly inundated land. The reservoir waters will be contained within the steeply incised banks of the Victoria Nile between Dumbbell Island and Nalubaale, thereby minimizing the amount of newly inundated land.


The associated Interconnection project being developed for UETCL involves the proposed construction and operation of the high voltage electrical transmission infrastructure needed in part to interconnect the proposed Bujagali Hydropower project to the national electrical grid and to strengthen the evacuation of electricity from the project. The proposed IP includes a 70 km transmission line to convey power generated to a new substation to be located in Kawanda, on the outskirts of Kampala; a 17 km transmission line to connect the Kawanda substation to the existing Mutundwe substation located in the southwest section of Kampala, where some minor upgrades will be needed to accept the new line; and, two 5 km transmission lines to establish interconnections between Bujagali and the Tororo substation in eastern Uganda and the Nalubaale substation in Jinja.

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