On Friday 17 November, an agreement to build a power plant in Bujagali, Uganda was signed by a consortium, headed by Veidekke ASA. The consortium consists of ABB Distribusjon AS, Alstom Power Ltd. (Switzerland), GE Energy (Norway) AS and Skanska AB in addition to Veidekke.

A prerequisite for the construction of the project is that project loans be secured by guarantee agencies of the participating countries.

"It is very exciting for us to play a central part in a consortium with such strong partners, says Mr. Venold, President & CEO of Veidekke. "This is Veidekke's largest construction contract so far. Our share of the contract amounts to approximately NOK 1 billion."

The project
The power plant is situated 1,100 metres above sea level at Bujagali Falls, about eight kilometres north of Lake Victoria, the source of the Nile. The plant is a low-pressure river power plant. The vertical drop is 25 metres and total installation is 200 MW.

The main elements of the project:

· Rock fill dam of 850 metres with an asphaltic core. Volume 750,000m3
· Power station with four turbines
· Spillway with gates
· Control/service building and switchyard
· Transmission lines to Kampala and Owen Falls

The Client
The client is AES Nile Power Limited, which has been established solely for the purpose of ownership and management of the Bujagali power plant. Owner of the project company is AES Corporation USA, which has its main office in Arlington, Virginia and is listed on the New York Stock Exchange. Its core business is production and sale of electricity. Today the company has 114 power plants on four continents, and has 12 more power plants under construction. Bujagali will be the company's first hydroelectric power plant in Africa. In 1999, AES had a turnover of 3.2 billion USD and a profit before taxation of 420 million USD. Its equity capital totals 2.1 billion USD.

The Contractors
Bujagali EPC Consortium (BEC) consists of several companies with connections in Norway. The building and construction work will be carried out by Veidekke and Skanska International Civil Engineering. Alstom Power Ltd. (Switzerland), GE Energy (Norway) AS and ABB Distribusjon AS will be responsible for the electro-mechanical work.

Veidekke heads the consortium. A German consulting company, Lahmeyer, is co-operating with a Norwegian company, Norplan, to provide the design.

Type of Contract and Agreement Stipulations
The contract is an EPC-contract (Engineering Procurement Construction), in which the contractors give a binding price of a complete and fully tested power plant.

IFC is head of the financing institutions, which also include the World Bank, IDA, African Development Bank (AfDB), Deutsche Entwicklungs Gesellschaft (DEG), West LB and various institutions for export credit.

The Norwegian Guarantee Institute for Export CreditS (GIEK) has in principle consented to give security. The Guarantee Institutes of Sweden, Switzerland, Italy and Finland are also positive to the project. Approval by the IFC and the World Bank is a prerequisite for further involvement by the guarantee agencies.

The environmental aspects of the project are very important, and handling those aspects in accordance with international guidelines is a precondition for approval by the financing institutions.

Time schedule
It is expected that the project will be fully financed by 1 July 2001, and that construction will start immediately after with an estimated construction period of 44 months before the testing of the project can begin. The project will be completed six months later. In the case that an additional turbine is built, the construction time will be prolonged by two months.