According to a World Bank report, after South Africa, Uganda has the largest number of IPPs in sub-Saharan Africa and the only other competitively bid grid-connected solar PV programme, reports Nicolette Pombo-van Zyl.
During the Future Energy Uganda conference held in September, Maria Kiwana, Senior Advisor to the President and Uganda’s former finance minister, explained that energy infrastructure is a means to an end: “It is a support sector and it needs to be linked with agriculture, trade and industry, and skills development.”
The country’s sweeping energy goal to increase installed capacity from 868.9MW to 4,100MW by 2025 will see 96% of its power generated from renewable sources and 98% of the population having access to electricity by 2030. And with 25 industrial parks in the pipeline, this landlocked country is inviting investors to set up shop, says Harrison Mutikanga, CEO of UEGCL, motivating the country’s generation expansion drive.
Cementing this drive, endeavours are underway to attract businesses and investment, such as Power Africa, which is working across grid- and off-grid projects and within the policy enabling environment in Uganda. Kate Steel, energy director at Power Africa, unpacked the scope of activity – including investments by OPIC in biomass and micro-hydro and USADF in local entrepreneurs and grid financing. “Uganda is tapping into a diversity of power sources; it is creating a clear regulatory environment with clear policies and stable tariff structures; and it has clarity, transparency and consistency,” said Steel, arguing the strengths of Uganda’s energy roadmap.
However, Kiwana recommended that in order to sustain the growing middle class, Uganda needs to develop technical knowledge, reduce solar and wind generation costs, lower hydropower costs, invest in agriculture, infrastructure and minerals, use concessional financing for private sector, tap into available green funds, use risk mitigators and bring risk perception down.
The list is long, but it is decidedly attractive to invest in, and conduct business with, a country that is actively striving to implement its strategic roadmap. This is evident as noted by Steel who stated that grid connection in Uganda is driving economic growth. But she warned that tariffs should be competitive in line with regional prices.
For off-grid, the focus should be on the provision of services essential to households even if the tariffs are higher than grid costs, as long as consumers are willing to pay. Bear in mind that with an extensive focus on generation, Uganda might need to evaluate its T&D assets. Ziria Tibalwa Waako, CEO of ERA, does not agree that the planned generation overshadows all other aspects, stating it is “not a lot in comparison to NDP II targets”. However, she does concede that there will be a need to facilitate Last Mile distribution to connect with the planned industrial parks. “The master plan for T&D is being prepared by a system planning coordination committee,” said Waako in response to any concerns.
There is also a concern around the availability of skilled engineers, welders and technicians to accommodate sector growth. This has been taken seriously by UEGCL, which has implemented an intensive training and capacity building programme along with development partners to set up hands-on training centres for engineers and technicians. Mutikanga shared that through support, training is underway at the International Centre for Hydropower as well as in China on installation, testing and commissioning. ESI
Do you have the answer?
Mutikanga asks: “Should we call investors when we don’t have electricity capacity, or do we call investors only after we have invested in adequate generation capacity?” Send your answer to Nicolette@esi-africa.com or share your thoughts via our social media platforms using #FutureEnergyUganda