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Government may issue energy bonds


29 July 2008 – Private sector stakeholders have asked the Ugandan government to issue energy bonds to enable the development of renewable energy, in an effort to increase energy supply in the country and meet growing demand.

Despite the liberalisation of the Ugandan energy sector, almost no development has taken place, largely due to the high cost involved in energy production.

"The energy bond is very important, it was recommended many years ago and included in the policy but we don’t know what is happening," said Mr Gerald Ssendaula, chairman of the Private Sector Foundation of Uganda and former minister of energy.

Mr Ssendaula was speaking at the Chairman’s forum, which was convened to examine the viability of private sector participation in the renewable energy sector.

According to Geoffrey Kitakule, East African Development Bank Lead Specialist, Corporate Finance, "The Electricity Regulatory Authority (ERA) did advertise the available opportunities for the private sector to exploit but nothing has been done because the ventures are too costly".

"The only solution is for government to issue energy bonds to reduce on the cost of funding."

Energy Minister Mr Daudi Migereko who was the guest of honour at the event, said; "Issuing energy bonds is one of the issues government through the ministry of finance is working on to encourage private sector engage in the development of the sources".

"Let us face the challenge and work together to reduce barriers/obstacles to investments in this sector. One of the ways this can be achieved is through increased dialogue between the private sector and Government. Regular private sector feed back to Government on workable solutions is welcome."

"Our biggest challenge as government remains to increasing the supply of power, reduce power system losses, and to provide power at affordable tariffs," Migereko said, this despite an expected injection of 100MW into the distribution network in August this year.