Uganda sets ambitious energy projects by 2010 end

* Power projects to start by end of 2010

* Uganda to build oil refinery

By Jack Kimball

KAMPALA, June 4 (Reuters) - Ugandan President Yoweri Museveni announced on Thursday that his east African nation would more than double its energy capacity by exploiting two gas deposits and completing two hydropower dams by the end of 2010.

The ambitious targets were set to come to fruition as Uganda gears up for a national election in 2011, expected to be a hotly contested poll in which Museveni is likely to stand for another term.

Museveni is expected again to face opposition leader Kizza Besigye who hopes to unseat one of Africa's longest serving leaders.

"Cheap energy and transport will lower the costs of doing business in Africa and increase competitiveness," the former guerrilla leader told parliament.

Museveni said Uganda hoped to harness two gas fields for power generation. The Bujagali dam of 250 MW would come into operation at the end of next year, and the government would fund the 700 MW Karuma Falls -- delayed after a European contractor pulled out -- at a cost of $1 billion.