Uganda has an estimated potential of 5,300 megawatts of energy from its renewable sources. The policy goal is to increase the use of modern renewable energy (RE) from the current 4% total energy consumption in the country, to 61% levels of consumption by 2017.
In order to develop the energy sector, the Government of Uganda has prioritized and liberalized the sector to enhance efficiency. It has formulated appropriate policies. In 1999, it came up with the Power Sector Strategic and Implementation Plan. The Electricity Act was enacted shortly after, also in 1999.
Currently Government seeks investors on a public private partnership basis for nine plants varying in hydro power capacity from the 600 megawatts Karuma Dam to dams with smaller capacity such as the Nyagak III with 4.4 megawatt capacity. Others in this category include Ayago with 600 megawatts, Oriang with 400 megawatts and Muzizi with a modest 52 megawatts. Investors are also welcome to venture into the development of other RE sources including solar and biomass.
Policy and Tariffs
Uganda's RE Policy policy spells out Government's commitment to the development and use of RE resources. In policy are spelled out the standard power purchase agreements and feed-in tariffs both of which are aimed at reducing the transaction time. Feed-in tariffs are liable to periodic reviews. Currently they are at about US$0.10 cents for feed-in of 9-20 megawatts of electricity; US$ 0.11 cents for those feeding 1-9 megawatts of hydro power to the grid. For those feeding up to 5 megawatts to the grid, the feed-in tariff is US$ 0.13 cents. The tariff for geothermal energy is US$ 0.7 cents while it is US$ 0.12 cents for wind energy. There is no set tariff for solar energy as it is open to competitive bidding.
To oversee developments in this sector, an institutional framework at the apex of which is the overseer and coordinating Ministry of Energy and Mineral Development. The Electricity Regulatory Authority (ERA) set up by the Electricity Act of 1999 is responsible for the regulation of the sector. ERA issues licences, sets up and enforces standards and sets up feed-in tariffs. For activities in rural electrification, there is the Rural Electrification Agency (REA) which is the Secretariat of the Rural Electrification Board set up to manage the rural Electrification Fund. REA is charged with oversight on all activities associated with providing electricity to rural areas in Uganda.
To further support activities in this sector, Government has put in place credit facilities in the form of the Uganda Energy Capitalization Company. Apart from pooling resources from Government, investors and development partners to support viable RE undertakings, the Company also provides technical assistance to RE operators.
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