Uganda shouldn’t be borrowing money from China to fund its energy projects when institutions like National Social Security Fund (NSSF) have the money and capacity to finance such initiatives, President Yoweri Museveni has said.
The president was speaking at a dinner organized to celebrate 30 years of NSSF Uganda’s existence at Serena Hotel in Kampala. The NSSF is a National Saving Scheme mandated by government through the NSSF Act to provide social security services to employees in Uganda.
“We borrowed money from china to build Karuma dam and we (government) contributed 15 percent. In the future, NSSF could have a stake in dams like Ayago; Karuma is already funded,” the president siad. President Museveni said Ayago dam alone would generate about 800MW.
Karuma Power Station is a 600 megawatts hydroelectric power project under construction at Karuma Falls on the banks of River Nile in Uganda. Construction of the dam and power station officially started on 12 August 2013 and will go on for the next five years.
Karuma is projected to be the largest power-generating plant in East Africa when completed. Construction of the power plant was awarded to Sinohydro Corporation, a Chinese construction company.
In 2014, the Chinese Export-Import (EXIM) Bank of China agreed to fund 85 percent of the construction costs, in the form of a repayable concessionary loan. The Ugandan government will fund 15 percent of the cost.
In March 2015, the Ugandan Parliament assented to two loans totaling $1.435 billion, from EXIM Bank for the construction of Karuma. And now the president wants local financiers to participate in projects like Ayago Power Station and Isimba Power Station.
The President’s words came shortly after the Fund’s managing director Richard Byarugaba asked government to put in place ‘necessary vehicles for investment’ so that they can play a part in long term financing.
“We are able to finance infrastructure projects like roads, railway, the oil refinery and hydropower dams. Give us this opportunity, we won’t let you down.” Byarugaba, the NSSF managing director appealed to government.
According to NSSF board Chairman Patrick Byabakama Kaberenge the Fund currently has approximately 500,000 active members who make periodic contributions with an asset base of over Shs6 trillion ($1.8 billion), making it the largest pension Fund in East Africa to-date.
The Fund laid out its strategic path for the next 10 years, with a stronger emphasis on; growth in customer satisfaction to over 90%, providing members with an interest of at least 2% above 10 year inflation, growing the Fund size to Shs20 trillion and to become one of best pension Fund worldwide.
The National Social Security Fund (NSSF) has paid Sh1, 039bn in benefits to over 200,000 members over the last 30 years. This feat has been inspired by consistent growth in benefits paid from about Shs1.6m in 1986 when the fund was started to Shs186 billion in 2015.
“Over the 30 years, we have grown to become the largest Fund in East Africa by value and the largest financial institution in Uganda.” Byarugaba said in a press statement ahead of the 30 year celebrations.
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