US gives US $11m towards electric power generation in Uganda

Players in the off-grid sub-sector will benefit from a new three-year US $11m project that is part of the support towards new electric power generation and access initiatives.

According to US ambassador to Uganda, Ms Deborah Malac this Power Africa initiative will support innovation, market access, mobilize finance and provide transaction advisory services to private sector players in the off-grid sector.

In Uganda, Power Africa has supported 420,000 new connections for off-grid solutions (solar home systems) over the last two years.

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Ms Malac said according to the Global off-grid Lighting Association, between 2014 and early 2017, 2.9m Ugandans gained electricity access through solar home systems. To maintain such gains, there is need for more transparency and effort from government.

Investors in the private energy sector also want assurance that the investment climate and clear rule of law is conducive enough for them to make profit.

“We want to invest in Africa. In order to do that, we have to satisfy many requirements of the institutions that lend the money. So the investment climate has to be conducive to make those deals happen,” Mr Paul Hinks, chief executive officer Symbion Power, said.

Mr Peter West, UK High Commissioner to Uganda, further asked the government to consider preferential tax regimes that support the solar energy industry.

Free connection policy

It is expensive to connect communities to the national grid. However, in his remarks at the summit, Mr Godfrey Turyahikayo, executive director Rural Electrification Agency (REA), said the government is finalizing the operation manual for the free connection policy which will cost it about US $48.72m every year.

According to Mr Turyahikayo, consumers whose premises are one pole away from the power grid, and have wired their house and paid inspection fees to an electricity company; will benefit from the policy.

By taking up the burden, the government expects to increase demand not met by supply. A 2016 report by Daily Monitor indicates that Uganda’s installed generation capacity was about 862MW but up to 200MW were redundant.

About 10% of rural Uganda is connected to the national power grid while 20% of urban centers are connected. REA hopes to increase the number of connections over the next two years to 30 and 60% in rural and urban areas, respectively.

Should it achieve its 60% target, 57% are expected to be on the national grid while 33% will be off-grid connections.

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