The European Union plans to invest 60 million euros ($63 million) in upgrading one of the Uganda's largest hydropower plants, helping partially plug a financing gap for the country's ageing energy infrastructure, a top diplomat said on Monday.

The Nalubaale and Kiira hydropower plant complex located at the source of River Nile at Jinja in Uganda's east produces about 380 megawatts (MW) and is Uganda's oldest power plant, commissioned in 1954.

South African power giant Eskom ran the plant under a 20-year concession that ended early this year, after which the government retook control.

"We'll be investing some 60 million euros ... in the rehabilitation of Kiira and Nalubaale hydropower plant in order to provide reliable energy for Uganda's industrialisation," Jan Sadek, the EU's ambassador to Uganda, told a mining conference in the capital Kampala.

He did not say when the works would begin or whether the funding would be a grant or credit.

Sadek said the funding would be advanced under the EU's global gateways strategy, which is designed to help meet the United Nations' Sustainable Development Goals by 2030.

Uganda's energy infrastructure is underfunded and the ageing of parts of the network has caused widespread outages and sometimes breakdowns.

Uganda has an installed capacity of about 1,400 MW of power, mostly from its hydro dams, and that will rise to 2000 MW when a Chinese-built plant, Karuma, also on River Nile is commissioned this year.

($1 = 0.9459 euros) (Reporting by Elias Biryabarema Editing by George Obulutsa and Mark Potter)