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Bujagali Energy Limited (BEL), the company behind Uganda’s largest hydropower station, has broken its silence on the controversial 14-year tax waiver granted by the Government of Uganda.
The waiver, covering the period from 2018 to 2032, has sparked intense public debate and parliamentary inquiry, with critics raising concerns about transparency, fairness, and the impact on electricity tariffs.
Speaking to Nilepost at the Bujagali Hydropower Plant in Njeru Municipality Buikwe District, BEL’s General Manager Alaister McDougall defended the arrangement, saying the tax waiver was part of a broader financial restructuring initiative involving the Government of Uganda and several international development partners, including the International Finance Corporation (IFC) and the African Development Bank (AfDB).
“This waiver was negotiated between the Government and international refinancing agencies to help reduce the annual debt burden and ultimately lower the cost of power generation,” McDougall explained.
He maintains that the Tax waiver continue to taint the image of the BEL yet it doesn’t benefit the Company in any way.
Commissioned in 2012, the 250-megawatt Bujagali Dam dramatically transformed Uganda’s power sector, ending years of persistent load shedding.
At the time, it increased the country’s installed electricity capacity by 44% and remains a vital contributor to Uganda’s national grid.
However, McDougall revealed that despite the plant’s capacity, only about 230 megawatts are currently being consumed each day — meaning that 32% of Bujagali’s energy output remains unutilized.
This underutilization raises questions about energy planning and grid expansion.
“We produce 250Megawatts but Uganda Electricity Transmission Company Ltd can consume about 230 megawatts daily depending on the load which constitutes to 68 or 70% but unfortunately the 32% remain unutilised” he said
The Bujagali project was established under a 30-year Build-Own-Operate-Transfer (BOOT) concession agreement.
After this period, the ownership of the $2 billion hydropower facility will be transferred to the Government of Uganda for just one U.S. dollar.
BEL says the plant is designed to remain operational for at least three more decades beyond the transfer.
While the tax waiver is intended to reduce the cost of electricity by lowering financing expenses, some Members of Parliament and civil society groups argue that the details of the agreement remain opaque.
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They demand more clarity on how the benefits are being passed on to consumers and whether the waiver is achieving its intended purpose.
Nonetheless, BEL maintains that the waiver has contributed to greater reliability in power supply and reduced disruptions, benefiting industries, businesses, and households across the country.
As Uganda’s demand for electricity continues to grow — driven by urbanization, industrialization, and digital transformation — Bujagali remains a cornerstone in meeting that need.
With debates around energy policy intensifying, experts say the focus should now shift toward expanding access, improving grid efficiency, and ensuring that strategic infrastructure investments like Bujagali are fully leveraged for national development.
Though questions around governance and transparency remain, few dispute the dam’s importance in powering Uganda’s next chapter.
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