East Africa’s wealth of hydropower has been dwindling due to unexpected droughts, and the answer to this problem has been emergency power plants. Uganda opted to combat its chronic power outages with thermal power which accounts for 85% of the country’s power generation costs. Most of the emergency power generated in Uganda comes from Aggreko, a provider of emergency power generators. However, the UK firm has faced criticism for its failure to deliver the full capacity in PPAs.
Aggreko has dominated East Africa’s thermal power generation, pulling in over $1 billion in six years in Uganda alone. The emergency power provider came into Uganda in 2005 with a $160-million three-year PPA to install a plant in Kampala to generate 50 MW. Over time, Aggreko has built three plants worth $666 million, but as a result of the extensions Uganda has required, the price that Uganda has paid for its emergency power plants increased.
And following Uganda has been Tanzania’s recent announcement that it signed a $37-million contract with Aggreko to supply 100 MW of emergency power for 12 months. Under the terms of agreement, Aggreko will provide two 50 MW diesel-powered plants at Ubungo and Tegeta as well as manage the fuel supply associated with power generation.
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