By George Obulutsa
NAIROBI (Reuters) - Uganda plans to double the length of its power grid in four years at a cost of $500 million as it seeks to boost electricity production and reduce transmission losses, a senior government official said on Tuesday.
East Africa's third-largest economy is keen to rapidly expand its electricity generation infrastructure before its planned start of crude oil production by 2017.
Simon D'Ujanga, Uganda's state minister for energy, said the country plans to expand its power lines from 1,700 km to 3,400 km.
"The transmission network will be doubled ... within the next four years. We have six transmission line projects totalling $500 million, these being implemented concurrently," D'Ujanga told a regional east Africa power industry conference.
Projects included lines serving domestic markets in Uganda, a separate line connecting it to Kenya and another to Rwanda.
In June, Uganda signed a contract granting China's Sinohydro Group Ltd a tender to build the 600 MW Karuma dam on the Nile River at a price of $1.65 billion.
Uganda is depending on Karuma to generate sufficient cheap power to meet fast-growing energy needs and support an economy eyeing double-digit growth rates once crude oil production starts. Growth is projected at about 6 percent this fiscal year.
D'Ujanga said work on the Karuma dam had started last month.
"The contractor is now mobilised and is on site. We think in 60 months' time we should commission this power station," he said. Most of Uganda's 800 MW power output comes from hydro power generation.
In addition to Karuma, Uganda also plans to build a smaller hydro power plant, Isimba, on the Nile at a cost of $600 million, while a feasibility study was being done for another 600 MW plant.
Uganda also plans to increase production from small to medium hydro power plants to 150 MW in the next three years, up from 60 MW at present.
D'Ujanga said the engineering, procurement and construction (EPC) contract for Isimba was signed last Friday and early work had started. "Groundbreaking is expected this month," he said.
Ugandan power distributor Umeme has said it will cut energy losses during distribution to an agreed regulatory target of 23 percent of energy purchased from the transmission company in 2013 from 26.1 percent in 2012. Energy can be lost via the distribution network and illegal connections.
D'Ujanga also said that the country planned to increase the amount of electricity generated from bagasse - sugarcane waste - to 100 MW in the next four years from 55 MW at present.