Kampala, Uganda — ESI-AFRICA.COM — 12 October 2011 – The government of Uganda has set up an US$8.6 million fund “’ a joint project with the World Bank “’ to help finance new power projects in the country.
A statement issued here said the fund “’ to be managed by the Uganda Energy Credit Capitalisation Company (UECCC) “’ was expected to help the private sector invest in electricity generation projects through loans. The projects would include mini hydropower dams of up to 1MW, solar plants and other renewable energy projects to supply rural consumers.
Statistics show only 12% of Ugandans are connected to the national grid, prompting the government to push through more projects to meet the energy shortfalls, which are said to be denying the economy the much needed impetus to grow.
The statement added that the fund had a seed capitalisation of about US$7.2 million, and a further US$1.44 million in the pipeline from developing partners.
“Uganda’s banking industry has not been able to meet the financing needs of the energy sector, which are long term in nature,” UECCC general manager Specioza Kimera Ndagire said, adding that her company would work with 10 banks that were participating in the administration of loans dispensed under this fund, to offer flexible terms for borrowers with a 5 to7 year repayment grace period.
Uganda aims to generate 3,800MW of electricity in the next five years, with a mix of the big hydro projects, such as 250MW Bujagali, which comes on line by end of the year, and 600MW Karuma, whose construction starts early next year. This capacity should shore up the existing 380MW Owen Falls Dam and several smaller hydro power dams countrywide, now at different stages of planning, procurement or construction.
In addition, sugar millers Kakira, Kinyara and Sugar Corporation of Uganda produce varying capacities of electricity from bagasse for their own use, the remainder of which they supply to the national grid.