Karuma Dam: Who Will Pay for the Defects?

Op-Ed: Early this month, the media reported that the contractor of the Karuma Hydropower Plant is seeking an additional Shs148 billion to address defects affecting the project.

The request has raised fresh concerns about the cost, quality and value for money of Uganda’s flagship electricity project.

The development is particularly troubling because Karuma was presented as a major solution to Uganda’s electricity challenges. The government promised that its relatively cheap hydropower would help deliver reliable and affordable electricity to households and businesses.

Karuma is Uganda’s largest hydropower project, with an installed capacity of 600 megawatts. Construction by Sinohydro Corporation began in 2013 and was initially expected to take about five years. However, the project took roughly 11 years to reach commissioning, raising questions about the delays and the overall cost of delivering the facility.

The Karuma Hydropower Station was finally commissioned by President Yoweri Museveni in September 2024. At the time, the project was expected to increase Uganda’s electricity generation capacity to nearly 2,000 megawatts.

During the commissioning, the President emphasized the need for Uganda to generate sufficient electricity at a low cost. Karuma was therefore expected not only to add 600MW to the national grid but also to contribute to reducing the cost of electricity.

However, evidence suggests that the challenges facing the project are not entirely new.

Nearly two years after commissioning, the 2025/26 Budget Framework Paper by Parliament’s Budget Committee indicated that Parliament had approved the Ministry of Energy’s request for an additional Shs89 billion to supervise and rectify structural defects and unfinished works at Karuma and Isimba hydropower dams.

Of this amount, Shs51 billion was allocated to Karuma Dam, while Shs38.367 billion went to Isimba Dam.

The additional funding followed recommendations by the Budget Committee to facilitate defect rectification and quality assurance for the already costly projects.

While government considers spending additional money on the contractor, nearly 119 households displaced by the Karuma project remain uncompensated and have not been physically resettled.

The Parliamentary Committee on Environment and Natural Resources, in its report on the Ministerial Policy Statements for the 2026/27 financial year, indicated that government owes approximately Shs70 billion to Project Affected Persons under the Karuma Hydropower Project.

It is unfortunate that Parliament is now being asked to approve another Shs148 billion for the contractor while displaced Ugandans continue to wait for compensation and resettlement.

This raises serious questions about government priorities, accountability and value for money in the Karuma project.

If Parliament approves the additional Shs148 billion requested to address defects at Karuma, the expenditure will add to the financial burden of a project that has already been financed largely through government borrowing.

Ultimately, taxpayers and electricity consumers should not be left to bear the cost of avoidable defects, particularly where such defects arise from poor workmanship or failure to meet contractual obligations.

Government should therefore ensure that contractors meet their contractual responsibilities and bear the cost of defects attributable to their workmanship or failure to adhere to approved designs and specifications.

Parliament and other relevant oversight institutions should also ensure that any additional public funds allocated to Karuma are fully justified, transparently accounted for and backed by clear evidence of the work required.

At the same time, government should prioritise the compensation and resettlement of all outstanding Project Affected Persons.

Karuma’s success should ultimately not be measured simply by its 600MW installed capacity, but by whether it delivers reliable and genuinely affordable electricity to Ugandans while ensuring that the public receives value for the enormous investment made in the project.

The author is Olive Atuhaire, Research Associate

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