French international development agency Agence Française de Développement (AFD) has committed to more than double its funding into the Ugandan energy sector.
AFD’s country representative Virginie Leroy said the institution is allocating $55 million to Uganda’s electrification project, up from $21 million in the period to 2013, local newspaper The Observer reported.
Leroy said: “As a development agency, we have a specific interest in improving people’s access to the grid. The rate of access in Uganda is one of the lowest in East Africa and within Africa, especially in rural areas.”
“As you know, when people get electricity, they won’t cut forests. This question of access to energy is really linked to climate issues. Since the population [in Uganda] keeps on growing, we decided in 2014 to commit jointly with KFW [a German development bank] $48 million to build the Muzizi hydro power plant,” Leroy added.
The Observer reported that financial data captured in the AFD 2014 report, from 2009 to 2013, totalled $139 million, which was largely allocated to the water and sanitation sector.
Financial investment in Uganda
The report adds that 72% of the loans allocated by AFD in Uganda have been highly concessional sovereign loans, which are subsidised to a low interest rate.
The paper also indicates that $55 million has been committed to rural electrification in the southern part of the country with $48 million allocated for the construction of the Muzizi hydropower project.
Anne Paugam, chief executive officer of AFD, said: “Our mandate is to bring about new development models that ensure both the prosperity of the whole of the world’s population and preserve the planet. We contribute to this by tailoring our actions to the needs of partner countries.”
The East African country has a population of around 34.9 million with only 5% connected to the national electricity grid.
In March, Kenya-based M-KOPA Solar announced that it has connected an estimated 20,000 Ugandan homes to affordable solar power in the past 15 months in attempts to expand electricity access in the country.
The ‘pay-as-you-go’ energy service provider for off-grid homes is extending its product offering across the country with a target of connecting 50,000 additional off-grid households by the end of 2015.