The World Bank is considering giving multi-million dollar loans to two East African countries, hard hit by drought and severe energy shortages.
World Bank officials, say they are preparing to loan Tanzania $80 million and Uganda $100 million to invest in alternative energy sources. This announcement came following a meeting between World Bank President Paul Wolfowitz and representatives from the East African Community in Arusha, Tanzania on Thursday.
The two East African countries rely on power generated from hydro-electric dams. But three years of prolonged drought in the region have created a water shortage, resulting in the dams inability to generate sufficient electricity.
In Uganda, the problem is so severe that the government has imposed strict rationing across the country. In the capital, Kampala, residents suffer day long black outs, receiving power only every other day.
The drought, in addition years of mismanagement of water resources, have caused water levels in Lake Victoria to drop to critical levels in the past few years, leading to the recent closure of two major dams. With the $100 million loan from the World Bank, the Ugandan government hopes to lessen their country's dependence on hydro-electric power.
Government spokesman, Robert Kabushenga says Uganda will use the loan to fund many different solutions in order to solve the energy crisis.
"One of the main ones is something called bagasse, that originates from sugar cane," he said. "Then there is the element of bio fuels and also it might include looking at other places that are not on the river Nile that can also generate power. There are places that have already been studied and I think there is about four."
On Thursday Finance Minister Ezra Sumuru announced that Uganda's economic growth had fallen this year to 5.9 percent from 6.6 percent last year.
The minister attributed the slowdown to the drought and the ongoing power crisis which greatly affected the manufacturing sector.
The World Bank is likely to decide on the loans after the August recess of the World Bank board of member countries.