As part of the Utilities 2.0 Twaake pilot, the Minister of Energy and Mineral Development in Uganda commissioned a 40Wp minigrid in Kwiumu that will power 300 households and 60 local businesses.
The integrated energy initiative, the Utilities 2.0 Twaake pilot, unites the centralised power utility company Umeme Ltd and several leading Uganda-based distributed renewable energy companies (DREs). These include: Equatorial Power who constructed the minigrid; EnerGrow who provides asset financing for carpentry, refrigeration and other income generating appliances; and East Africa Power who contributed the productive use of energy technology for agricultural processing. The Twaake pilot is funded by the Rockefeller Foundation and coordinated by Power for All.
The project aims to provide a replicable model to create faster connections, increase productive use of electricity, improve overall energy system performance, promote economic growth in rural communities and improve business profitability.
In a country with only 28% of the population accessing electricity from the central grid, more than 10 million additional connections are required for Uganda to achieve universal access, according to the World Bank. At an average grid connection cost of $1,400, the required investment if grid extension is the only service provision method, would be in the range of $7 billion which comes in as around a fifth of Uganda’s current annual GDP (estimated at $37bn).
The Utilities 2.0 Twaake pilot is designed to at least halve this cost by promoting an integrated approach to electrification that uses all solutions available rather than only the main grid. Integrated energy solutions combine centralised and decentralised technologies (including solar home systems, minigrids, grid and smart grid systems) into an intelligent and interactive energy network that can deliver customer-centric, clean energy solutions to end energy poverty at the lowest cost and transform millions of lives faster than “one size fits all” approaches using on the main grid. According to recent models by Power for All and Duke University, connection costs can be reduced by 50% by leveraging a utility’s ability to access cheaper capital while increasing the value of the customers by providing them with productive electrical tools and appliances that drive up customers’ incomes and also their demand for energy. Through this integration, Uganda’s energy customers will derive more benefit for each kilowatt consumed, creating more opportunities for business, education, health, safety and overall quality of life.
As part of the project, the project wants to provide 50% of the businesses in Kiwumu with asset financing to assist businesses in accessing technologies that can help them increase income using electricity. Helping customers move beyond simple lighting and phone charging with appliance financing and financial literacy training for their businesses will fuel the potential of the pilot project to deliver jobs and improve incomes across both villages.
Uganda reaps the benefits of first of its kind partnership in Africa
This is the first multi-stakeholder partnership between offgrid renewable energy companies and a national utility in Africa. In partnership with Makerere University and several Ugandan companies, Power for All will evaluate the socio-economic benefits of integrated energy and the effectiveness of the business models tests in pilot. Together, the entire consortium will work with the government of Uganda to achieve Uganda’s first successful interconnected minigrid in mid-2022 and identify approaches to replicate and scale in order to accelerate energy access and deepen the benefits to the people of Uganda.
In his remarks, the state minister of Energy and Mineral Development, Okaasai Sidronius Opolot emphasised the role of energy in harnessing the country’s opportunities and driving the industrial and service sectors and underlined the importance of public -private partnerships like the Twaake pilot project.
“This project underpins the role that public private sector partnerships shall play in expediting development of Uganda’s energy sector. I hereby congratulate the project partners for this first-of-its-kind integrated energy project in Uganda that has the potential to not only fast track rural electrification but also stimulate energy demand for productive use.”
Selestino Babungi, Umeme Managing Director and CEO said, “Uganda is now facing a challenge of access to clean energy with about half of the population having access, of which 25% are connected to the grid and 26% using offgrid solutions like solar. Twaake is coming in to bridge the gap of delivering clean energy to the households. This partnership will ensure that we deliver clean energy to the population in this pilot phase, pick lessons and use it to scale up. The partnership will assist to drive Uganda’s electricity agenda.”
Power for All CEO, Kristina Skierka remarked that, “Neither centralised nor decentralised energy can end energy poverty alone. However, through partnership and leveraging comparative strengths, traditional utilities and innovative DRE companies can create a new frontier in the fight to end energy poverty,” said Kristina Skierka, Power for All CEO.
The Utilities 2.0 project in Uganda is also partnering with other private sector energy organisations such as Africa Mini-Grid Developers Association (AMDA), CLASP, CrossBoundary, Nxt Grid, as well as research organisations including Rocky Mountain Institute (RMI), University of Massachusetts Amherst, Duke and Makerere University.