A German development bank Kreditanstalt für Wiederaufbau (KfW) has pledged to connect more Ugandans to electricity by availing US$ 24m in concessional funding and grants. However, Uganda has to contribute counterpart funding mainly from the excess energy sales revenue.
The grant will be distributed over three years and the contribution is aimed at improving power generation from sources in renewable energy hence increasing access to electricity majorly in the rural areas of Uganda and also to encourage the sustainable use of biomass.
However, the electricity distributors in the Uganda will implement the roll out of the connection process to citizens who want to get connected to power supply.
It is noted that in Uganda, energy is a scarce commodity and only 15% of the population can access electricity and furthermore, only 6% in rural areas can access it and this affect the social development and economic growth of the people. The Ugandan government however plans to increase electricity access to about 40 per cent by 2040.
This mega project will be a good one and any excess sales revenue of energy will not be permitted to a return on investment, also, while other factors remain constant it should indicate a low retail power tariff.
Germany has so far been part of the funding of two hydropower plants in Uganda; Bujagal plant and Nyagak I which enormously replaced thermal power and hence reduced greenhouse gas emissions in the nation.
The Kreditanstalt für Wiederaufbau formerly known as KfW Bankengruppe, is a German government-owned development bank, situated in Frankfurt and 80% is owned by the Federal Republic of Germany and the States of Germany owns the remaining 20%. Their mission is to assist partner countries fight and eliminate poverty, maintain peace, protect the environment and climate and help in shaping globalization in an appropriate way.