June 5 (Bloomberg) -- Uganda will start building the 200- megawatt Karuma hydropower plant early in 2009 to tackle a national electricity shortage, President Yoweri Museveni said.

Uganda is talking with Norway's Norpak Power Ltd. over developing the plant, which may cost about $500 million, Museveni told parliament today in the capital, Kampala. The government has already allocated $200 million for the project, he added.

``We are working with the Norwegians, but in case they delay we shall continue alone,'' Museveni said.

Karuma was delayed after the government prioritized the construction of the 250-megawatt Bujagali power project, which is being jointly developed by the Aga Khan Fund for Economic Development and Sithe Global Power LLC. Uganda currently produces a total of 245 megawatts of hydro and thermal power compared with demand of 380 megawatts.

To contact the reporter on this story: Fred Ojambo in Kampala via Johannesburg at pmrichardson@bloomberg.net

Last Updated: June 5, 2008 11:36 EDT