Plans underway to solve Uganda’s electricity problem

Published 5 years ago -

According to the National Development Plan (NDP) 2010-15, the construction of large hydropower plants through public and private investments is one of the key strategic interventions to unlock the most binding constraints to economic growth and development of Uganda. NDP sets a power sector development target of annual per capita consumption increasing from 75kWh/Capita to 674kWh/Capita. This target requires an additional 3,500 MW to Uganda’s existing National Grid. With the Bujagali now in operation, the national grid has a capacity of 850MW. Projects listed under the NDP include karuma, Isimba and later Ayago hydropower plants. And a number of mini hydropower projects are under preparation for construction.

The projects will be implemented by the ministry of energy and mineral development which has implemented similar projects. Each project is supposed to take up to 60 months.

The Karuma hydropower project with its evacuation lines and the 4 industrial parks substations are currently undergoing appraisal by EXIM Bank of China. Appraisal for Isimba was completed and the financing of the project is being discussed in the committee of national economy.

The president of Uganda indicated need for financial support to the President of China during the BRICS summit in South Africa in March 2013, who in turn expressed willingness to provide funding for karuma, Isimba and Ayago hydropower projects.

The sites and the line routes have been chosen to be along existing electricity infrastructure and the proposed projects are designed to conform with existing relevant legislation in Uganda as well as international standards for electricity generation, transmission and distribution infrastructure. For land, it will be acquired progressively over the implementation period.

The government has consulted with the communities around the project areas and government agencies like NEMA, REA, ERA, Uganda Wildlife Authority, National Forest Authority etc to avoid any misunderstandings along the project with any involved parties.

The projects are not only going to increase the amount of power generated but connecting more households and institutions to the national grid will contribute towards reducing poverty and improving living standards. The projects are also expected to generate employment opportunities for the communities both during the construction and operational phase. For example in case of Isimba hydro power project, it has so far employed 171 Chinese in management positions, 24 Ugandans in management positions and 717 Ugandans in skilled labour.

The projects are going to improve interconnection with the neighbouring countries under the East African Power Pool (NELSAP) like Rwanda, soon South Sudan and Kenya, for Kenya it will help us connect to Ethiopia hence reducing power shortage in the country.

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The government has been working with Development Partners (DPs) including International Development Bank (ADB), Islamic Development Bank (IDB), The Export-Import Bank of China, AFD of France, KW of Germany, JICA and government of Norway, The Arab Bank for Economic Development in Africa (BADEA) and The Saudi Fund for Development (SFD), in order to implement the above sector strategies ensuring that developments of each component of the sector is undertaken.

In addition, the government of China agreed to finance the construction of the Namanve, Luzira, Mukono and Iganga substations to enable efficient distribution of power to key industrial centres.

These loans will no doubt increase our debt currently standing at US$5.7 billion as at March 30, 2013. However although the economy has suffered shocks ranging from high food and oil prices, the economy has remained resilient and the debt position has remained sustainable. Although the loans have slightly lower grant elements than IDA financing, it is not expected to increase the indebtedness of the country because it is income generating and meets the 35% OECD grant element.

Soon there will be no more power shortages in the country and hopefully UMEME prices per unit will become cheaper hence significantly benefiting the rural consumer. This will also improve on industrialization countrywide through rural electrification and reducing on the congestion in Kampala. Charcoal burning will also reduce hence saving our environment since charcoal will be substituted with electricity.



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