kfw

In East Africa, Uganda’s government is set to receive €21 million ($24 million) from Germany’s state-owned development bank, KfW, in concessional funding and grants to enable increased electricity connections.

However, in order for Uganda to access the funding, there are terms, which the country has to adhere to that require it contributing counterpart funding that can be obtained from excess energy sales revenue.

According to local news agency, the Monitor, between 2012 and 2015, Uganda’s Electricity Regulatory Authority earned Shs65 billion ($19.374 million) from excess energy sales.

KfW loan terms

The KfW grant is reported will be made available over a period of three years, of which people wanting to be connected to the electricity grid will have to apply through the electricity distribution companies that will be endorsed to roll out the connection projects.

It is said that currently, based on the Uganda Bureau of Statistics 2016, 20% of Ugandans have access to electricity, an improvement from 7.8% in 2002.

The improvement is said to be because of the increase in the length of the high voltage transmission lines from 1,427km in the mid-2000s to 1,627km now.

Over the same period, the medium voltage distribution line is also reported to have increased from 6,242km to 15,178km whereas the low voltage distribution line increased from 8,448km to 18,000km.

It is reported that government intends to extend these to increase access to electricity to about 40% by 2040.

New connection charges

Other reasons cited for the low access to electricity are new connection charges, which are between Shs98,000 ($29) and Shs326,000 ($97) for those seeking to be connected by power distributor, Umeme, which excludes the Shs41, 000 ($12) inspection fee.

The projects that will be financed using KfW’s grant and excess energy sales revenue will not be entitled to a return on investment.

 

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