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Monday, February 03, 2014 

Uganda to increase power generation

Sinohydro and Exim Bank of China officials tour the Karuma project site


KAMPALA, UGANDA–The commissioning of the 250MW Bujagali Hydro Power dam in 2012 gave Uganda a sigh of relief given that the months preceding it, were characterized by widespread load-shedding. 

This had grossly affected Uganda’s competitiveness as manufacturers and traders incurred high costs of operation because they resorted to using generators.

Statistics from Electricity Regulatory Authority (ERA) show that Uganda’s current total installed capacity is 682MW. Registered peak system demand in December 2013 stood at 503MW compared to 506MW in November.

However, the country needs to find additional sources of power given that the demand for electricity is growing at an annual rate of between 10-12%.

As a result, the country is looking at alternative sources of energy. Last year, ERA and the Ministry of Energy and Mineral Development issued several permits for different projects that will ease the increasing power demand in the country.

The much anticipated commencement of construction of Karuma Dam by Sinohydro, a Chinese Firm contracted by the government of Uganda to construct the 600MW Karuma dam begun.

A team of financiers from Exim Bank of China were in December 2013 taken on an assessment tour of the project site as negations for funding were drawing to a conclusion. They afterwards met the Finance Minister Maria Kiwanuka to close the deal.

Speaking to journalists later on, Mr. Song Yi Jun, Sinohydro Project Manager said, “As you can see, we have started assembling equipment and soon full scale construction will be under way.”

The firm has lined up 500 Chinese Experts to provide for the task which will see some 3000 locals directly employed at the peak period. 

The Chinese government will provide 85% of the total project cost through a loan while Uganda will provide the remaining 15% and is to be completed with 60 months.

Isimba hydropower project with an installed capacity of 183MW is also being developed by China International Water and Electric Corporation (CWE). The power plant and associated evacuation line will also be developed under bilateral cooperation between Uganda and China with the Chinese government providing a loan amounting to 85% of the total project cost with Uganda covering the other. The project will take 40 months.

Uganda also launched a country framework for nuclear that will help Uganda generate enough nuclear power which will only be used “for peaceful purposes.”

Launching the program, Prime Minister AmamaMbabazi said that the nuclear plan matches nuclear technology to national priorities for sustainable development.

The nuclear energy project was signed last year between Uganda and International Atomic Energy Agency (IAEA).

Mbabazi said the drive for investment that Uganda craves for cannot be realized if there is no supporting infrastructure like electricity, roads and railways that lower the cost of doing business.

According to Dr. Benon Mutambi, the Chief Executive Officer, ERA, The existing supply from renewable sources is sufficient to meet the current demand. We have reserve capacity of 100MW from two heavy fuel oil-based plants, one in Tororo and the other in Namanve. 

“However, we recognize that this is expensive which must be dispatched only as a last resort as demand continues to grow. During 2013, the heavy fuel oil plants were not dispatched,” he told journalists at a briefing to share the developments in the electricity sub-sector recently.

He also told the press that the Authority has in place plans to increase the uptake of renewable energy projects so as to accelerate them into production.

“Among plans is the Global Energy Transfer for Feed-in-Tariffs (GETFiT) scheme which aims at incentivizing developers to accelerate renewable energy projects into production and includes a premium range 1-2 cents per kilowatt hour on Renewable Energy Feed-in-Tariffs (REFiT).

“It avails a guarantee scheme to enhance the bankability of the projects and a syndicate of concessional funding from international financial institutions.”

According to ERA, the first round of bidding for the GETFiT resulted in qualification of eight renewable energy projects with a combined installed capacity of 83.7MW. Construction of these projects starts this year and will be commissioned within two to three years. 

The second round of bidding for the remaining capacity of 67MW was initiated towards the end of 2013 and more renewable energy projects are expected to qualify for the GETFiT premium. 

In addition to GETFiT, ERA increased the Feed-in-Tariffs for renewable energy projects in order to accelerate project uptake hence commissioning. All these measures are aimed at ensuring availability of sufficient electricity supply to meet the growing demand.

Government has commissioned construction of the 600MW Karuma Hydropower plant which will be developed under bilateral cooperation between Uganda and the Chinese government. 

In an effort to promote power generation from renewable energy sources, ERA issued five feasibility permits during the first half of the FY2013/14 to companies in order to facilitate undertaking of detailed studies for prospected development of a combined capacity 99MW of grid connected solar photovoltaic power in various parts of the country.

According to Mutambi, the Authority is in advanced stages of procuring a consultant to package a tender development of 50MW from solar photovoltaic projects which will be commissioned by mid-2015.

Five additional permits were issued for prospected development of 33.7MW of small hydropower plants. The Authority also extended the duration of three permits for the prospected development of a combined 36.2MW from renewable energy. 


By Emma Onyango, Monday, February 03rd, 2014