Ugandan plans to revamp and expand the national grid

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Ugandan power distributor- Umeme plans to revamp and expand its grid in the next seven years, an initiative that will force the country to spend a whopping US$ 1.2bn.

The company’s Chief Executive, Selestino Babungi said that the firm has already hired an adviser to explore options for raising the money for the project. He further said that the planned investments will be used to prepare for an expected rise in power that is projected to come online by 2020.

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“We have already hired an adviser to seek for options for raising the funds for the project which total up to US$ 1.2bn,” he said.

New hydro power plants

Currently, Uganda is developing two new hydro power plants funded by China which are located on the Nile – Karuma and Isimba. The two plants are anticipated to add a combined 780 MW of power to the grid once complete.

“Once the two plants come online, they will roughly double the country’s existing generation capacity which currently stands at about 700 MW,”said Mr Babungi.

Additionally, he pointed out that Uganda needs to invest in new infrastructure to uptake the new generation and this includes extending lines, building new substations and connecting more customers. This is very critical since Uganda’s energy market is largely seen as under exploited yet it holds a significant potential for growth.

At the moment, the grid reaches just to 23% of the country’s 40million people and power consumption, according Umeme, stands at 85 KW hours per capita annually. This is below the average per capita consumption rate of 150 KW hours for sub-Saharan Africa, excluding South Africa; this is according to a 2015 report by consultancy McKinsey.

Umeme is Uganda’s sole electricity distributor which saw its pre-tax profit fall by 77% majorly due to debt servicing costs.

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