The Ugandan parliament has returned a bill to liberalize the electricity sector in the country back to the committee stage, claiming it does not do enough to safeguard the Ugandan interest, Reuters reports.

The decision will hold up government negotiations with two private investors planning to build hydropower plants with a combined capacity of 700 MWe. The two plants were expected to cost $1 billion.

The proposed legislation would have permitted the licensing of independent power producers and removed regulation of the industry from the state utility, the Uganda Electricity Board. However, the measures were rejected virtually unanimously by the parliament.

The two projects under threat by the rejection are a 250 MWe scheme on the River Nile to be built by American Electricity Services in conjunction with the Ugandan Madhavanai family for $450 million and a 450 MWe plant in central Uganda to be built by Arab Contractors International at a cost of $500 million. Work on both projects is provisionally scheduled to start next year.