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Uganda

Governmental Framework

Governmental framework

The Ministry of Energy and Mineral Development (MEMD) implemented the Government’s Power Sector Reform and Privatisation Policy, which resulted in liberalisation of Uganda’s power sector. As part of this, the state-owned Uganda Electricity Board was unbundled in 2001 and broken up into Uganda Electricity Generation Company Limited (UEGCL), Uganda Electricity Transmission Company Limited (UETCL) and Uganda Electricity Distribution Company Limited (UEDCL). The Electricity Regulatory Authority (ERA) was created at the same time. Uganda introduced a feed-in-tariff (FiT) scheme in 2007. In cooperation with other donors, KfW introduced the GET FiT programme, which tops up government tariffs with a premium and boosts the attractiveness of investments in the sector.

 

Governmental institutions

Ministry of Energy and Mineral Development (MEMD)
The MEMD’s mandate is “to establish, promote, strategically manage and safeguard the rational and sustainable exploitation and utilisation of energy and mineral resources for social and economic development.” Its role is to provide policy guidance, to create an enabling environment in order to attract investment, to acquire, process and interpret technical data in order to establish the energy and mineral resource potential of the country and to inspect, regulate, monitor and evaluate the activities of private companies in the sector. Irene Muloni is the current minister.

http://www.energyandminerals.go.ug/

 

Electricity Regulatory Authority (ERA)

The ERA is a statutory body established in 2000 in accordance with the Electricity Act 1999, with the purpose of regulating the generation, transmission, distribution, sale, export and import of electricity in Uganda. It also guides the liberalisation of the electricity industry, and manages licensing, rates, safety and other matters concerning the industry. It is responsible for ensuring that electricity companies comply with the conditions of their licences, and for protecting the interests of consumers in respect of prices, charges and other terms of supply as well as the quality, efficiency, continuity and reliability of supply services.

http://www.era.or.ug/

 

Rural Electrification Agency (REA)

The REA was established as a semi-autonomous agency by the MEMD in 2001, with an operational mission to implement the rural electrification agenda under a public-private partnership. It functions as the secretariat of the Rural Electrification Board, which carries out the Minister’s rural electrification responsibilities, as defined in the Electricity Act of 1999. The REA is mandated to facilitate the goal of achieving a rural electrification rate of at least 22% by the year 2022, from 1% in 2010.

http://www.rea.or.ug/

 

Uganda Electricity Generation Company Limited (UEGCL)

UEGCL was incorporated in 2001 and is wholly owned by the government of Uganda. Its key responsibilities are the generation of electric power, and its sale within Uganda or as exports to neighbouring countries; building, operating and maintaining electricity generation plants; monitoring the operation of and maintaining its assets; and providing technical support as and when required. UEGCL also organises, supports, encourages and maintains training facilities in technical and related fields. It owns the 180 MW Nalubaale hydropower plant and the 200 MW Kiira hydropower plant. These facilities have been operated and maintained by Eskom Uganda Limited since 2003 pursuant to a 20-year concession agreement.

http://uegcl.com/

 

Uganda Electricity Distribution Company Limited (UEDCL)

UEDCL is the owner of the electricity distribution network. Network management was transferred to Umeme under a concession arrangement in 2004. As a result of this, UEDCL’s responsibilities changed to incorporate:

  • Administering the lease and assignment agreement
  • Supervising the completion of rural electrification projects that were under construction before the transfer of operations to Umeme
  • Ensuring that it is in a position to take over and resume operation of the electricity distribution and supply business in the event of premature termination of the concession Agreement

http://www.uedcl.co.ug/

 

Umeme

In 2004, UEDCL’s 33 kV distribution assets were transferred to a consortium comprising Globeleq and Eskom, pursuant to a 20-year concession agreement. Umeme operates, maintains, upgrades and expands the distribution network. It sells electricity to its customers and improves efficiency within the electricity distribution system. Umeme is listed on the Uganda Securities Exchange (USE) and on the Nairobi Securities Exchange (NSE).

http://www.umeme.co.ug/

 

Uganda Electricity Transmission Company Limited (UETCL)

UETCL is owned by the Ministry of Finance, Planning and Economic Development and remains the single operator of the transmission system. It is the counterparty to power purchase agreements and sells on power to the distribution network companies. It is responsible for bulk power purchases and sales, imports and exports of energy, and operation of the high voltage transmission system, as well as having the role of national system operator.

http://www.uetcl.com/

 

Independent Power Producers (IPPs)

A number of IPPs and private distribution companies have entered the power sector following liberalisation. To date, seven companies and cooperatives sell electricity to households, commercial clients and industry. In addition to the largest distributor, Umeme, these include the West Nile Rural Electrification Company, Ferdsult Engineering Services, Kilembe Investments, Bundibugyo Electricity Cooperative Society, Pader Abim Community Multipurpose Electricity Cooperative Society and Kyegegwa Rural Electricity Cooperative Society.

 

Regulatory framework - act, policies and regulations

Electricity Act 1999

The Electricity Act of 1999 defines the authorities and their funding for the electricity sector. Additionally, the assignment of licenses, the rural electrification and the rights and duties of customers are regulated. The salient features of the Act are:

  • Liberalization of the electricity industry
  • Disband of the Uganda Electricity Board (historically a vertically integrated monopoly) into three entities
  • Establishment of the Electricity Regulatory Authority
  • Establishment of the Rural Electrification Fund
  • Establishment of the Electricity Dispute Tribunal that has jurisdiction to hear and determine electricity sector disputes which are referred to it

 

Energy Policy 2002

The objective set out by the Energy Policy for Uganda is to meet the energy needs of the population for social and economic development in an environmentally sustainable way. Therefore, the Policy calls to increase access to modern and reliable energy services. Its bold policy vision contains:

  • to establish the availability, potential and demand of various energy resources in the country
  • to increase access to modern affordable and reliable energy services as a contribution to poverty eradication
  • to improve energy governance and administration
  • to manage energy-related environmental impacts
  • to increase the role of private sector in the power sector operations and future development

 

Renewable Energy Policy 2007

The Renewable Energy Policy 2007 aims to provide a framework to expand the contribution of renewable energy in the energy mix beyond large hydropower from 4% in 2007 to 61% in 2017. The vision contains:

  • to maintain and improve the responsiveness of the legal and institutional framework to promote renewable energy investments
  • to establish an appropriate financing and fiscal policy framework for investments in renewable energy technologies
  • to promote research and development, international cooperation, technology transfer and adoption of standards in renewable energy technologies
  • to utilize biomass energy efficiently so as to contribute to the management of the resource in a sustainable manner
  • to promote the sustainable production and utilization of bio-fuels
  • to promote the conversion of municipal and industrial waste to energy

The Policy promotes power generation from mini-hydro power schemes, biomass, co-generation, wind, solar, geothermal and peat. There are plans to include nuclear power generation in the power mix.

 

Feed-in tariff (FiT)

To promote the development and use of renewable energy sources, the Government has developed a FiT structure for power plants of up to 20MW and first published it in 2007. Independent Power Producers (IPPs) enter a Purchase Power Agreement (PPA) with the UETCL. In 2014, both a Standardized Implementation Agreement and a Standardized Power Purchase Agreement were published. These documents are considered to pave the way for significantly reduced transaction costs while providing a security to investors.

Small-scale renewable energy generation projects in an advanced planning status and with a valid development permit by ERA can apply for premium payments under the GET FiT program through participation in a competitive Request for Proposal and the subsequent evaluation process. So far, three rounds of Requests for Proposals have been carried out.

The program was officially launched in 2013. It has been jointly developed by the Government of Uganda, ERA and KfW and is designed to leverage private investment into renewable energy generation projects. The Premium Payments constitute a result-based incentive grant designed to enhance the financial viability of the selected projects. Premium Payments are structured as payments per kWh to chosen private developers, calculated on the basis of expected generation of eligible projects over the lifetime of the 20-year-long PPA.

The FiT for renewable energy power generation effective since March 2014 and the current GET FiT premium are as follows:

Technology Tariff (USD/kWh) Get FIT premium (USD/kWh) O&M % Cumulative capacity limits Payment period (yrs)
2015 2016
Hydro > 9-20 MW 0.085 0.014 7.61 135 180 20
Hydro 1-9 MW Linear[1] 0.014 7.24 105 135 20
Hydro 500 kW-1 MW 0.115 7.08 2.5 5.5 20
Bagasse 0.095 0.01 22.65 95 120 20
Biomass (MSW) 0.103 0.01 16.23 25 45 20
Biogas 0.115 No premium required 19.23 25 45 20
Landfill gas 0.089 19.71 20 40 20
Geothermal 0.077 4.29 50 75 20
Wind 0.124 6.34 100 150 20

[1] Computed as a regressive allocation of costs with increase in plant size.
Tariffs are subject to change.
Source: Uganda Electricity Regulatory Authority, GET FiT

Only later, in April 2014, a tariff for solar PV was re-introduced: According to the ERA, power from PV plants is not generated in sufficient quantities to allow the interconnection with the national grid. However, one long-term policy measure to increase diversity and security in energy supply in the country is to develop small renewable projects including the use solar PV generated electrical energy. In that regard, the board of ERA considered and approved a FiT of US$ 11 Cents per kWh for grid connected solar PV energy.

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Key figures

Available statistics:
Capital
Kampala
Official languages
English, Swahili
Population (2014 census), m
37.78
Population growth (2014), %
3
Compound Annual (GDP) Growth Rate, (2011-2015), %
4.4
GDP per capita (2015), USD (current rate)
675.6
Rural population (2014), % of total
83.6
Ease of Doing Business Index (2014)
150 (of 189)
Median age of population, years (2014 est.)
15
Inflation (2014), %
2
National currency
Ugandan Shilling (UGX/USh)
Installed generation capacity (2015), MW
810
Installed fossil fuel capacity (2015), MW
112
Hydro capacity (2015), MW
648
Other RE capacity (2015), MW
50
Renewable electricity output (2014), % of total electricity output excl. hydro
6
Current expansion plans (to 2017), MW
1,420
Average distribution and transmission losses (2011), % of output
7.68
Net electricity imports (2012), GWh
-11
Peak demand (2015), MW
509
Per capita electricity consumption (2014), kWh
69.5
Electrification rate (2012), total, %
15
Electrification rate, urban (2012), %
55
Electrification rate, rural (2012), %
7
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