THE STATE AND FUTURE OF INFRASTRUCTURAL PROJECTS IN UGANDA

1. THE STATE AND FUTURE OF INFRASTRUCTURAL PROJECTS IN UGANDA Presentation By Eng. Dr. Badru M. Kiggundu at the AEMI High Level Energy and Mining Conference Imperial Royale Hotel, 26 April 2019

2. OUTLINE OF PRESENTATION • Scope of the Energy / Power Sector • Policy and Legal Framework • Energy Sector Prospectus • Strategies in Place to develop the Sector • Short term Projects • Mid term Projects • Long term Projects • Investment Opportunities/challenges • Conclusion

3. INTRODUCTION • Adequate, affordable and reliable power supply is the engine for social and economic development of any country. • What has the government done?: • Uganda has put in place a conducive policy and regulatory framework for fostering investment in the energy sector and • Government has earmarked energy as a priority area for financing to facilitate economic and social transformation. Energy investment fund been put in place.

4. THE SCOPE OF THE ENERGY SECTOR • Power Subsector • Power Generation • Transmission • Distribution/ Rural Electrification • Renewable Energy • Biomass (Wood & Charcoal, Cogeneration) • Small Hydro, Solar, Wind, Geothermal • Atomic Energy • Nuclear for Power Production • Energy Efficiency • This is cross cutting for all forms of Energy.

5. The key priority in the Energy Sector • To increase electricity generation capacity and develop the transmission network • To increase access to modern energy services through rural electrification and renewable energy development • To promote the efficient utilization of energy resources and reduction in power losses

6. THE POLICY FRAMEWORK The Energy Policy for Uganda 2002 Policy Goal To meet the energy needs of Uganda’s population for social and economic development in an environmentally sustainable manner.

7. It aims to provide a framework to increase in significant proportions the contribution of renewable energy in the energy mix. Main features: Introduced the feed in tariffs. Standardized Power Purchase Agreements. Obligation of fossils fuel companies to mix products with biofuels up to 20%. Tax incentives on renewable energy technologies. Renewable Energy Policy for Uganda 2007

8. Legal Framework The Electricity Act, 1999: The salient features of the Act are to provide the enabling legislation for: • Liberalizing the electricity industry; • Unbundling of the Uganda Electricity Board into three entities namely generation, transmission and distribution; • The establishment of Electricity Regulatory Authority (the “ERA”) to regulate the sector;

9. Legal Framework • The establishment of the Rural Electrification Fund (the “REF”), with the main objective of enhancing rural access to electricity; and • The establishment of the Electricity Dispute Tribunal (the “EDT”) that has jurisdiction to hear and determine electricity sector disputes which are referred to it.

10. Impact of Policy Framework • Generation infrastructure such as Bujagali Hydropower, about US$ 860 M • Over US$ 200M from Construction of Renewable energy projects such as Nyagak I 3.5 MW, Mpanga 18 MW, Bugoye 13MW, Buseruka 9 MW, Ishasha 6.5 MW, Cogeneration 25MW, etc. • Eskom under their Generation concession have so far invested over US $ 10 M.

11. Impact of Policy Framework • On going Generation infrastructure development(the recently commissioned 183MW Isimba HPP and the 600MW Karuma HPP due to be finalised in December 2019) • Extension of the transmission backbone of the country (such as kawanda-Masaka, Nkenda-Hoima, Mbarara-Mirama, and all associated substations) • Cross border projects such as Nangoma electrification, NELSAP are being implemented.

12. Impact of Policy Framework • Under Distribution, Umeme Ltd has so far invested over US $120 M • Additional investments by the Rural Electrification concessions from WENRECO and UEDCL. • Current generation capacity is 1202 MW and will go up to 2000 MW by 2020.

13. CURRENT POWER GENERATION STATUS

14. Aerial View of Isimba HPP

15. Energy Sector Prospects • Government is now looking to expand the power demand base to absorb the increasing generation capacity. • Development of Industrial parks across the country to foster industrialization is one of the prioritised strategies. • Grid extension and intensification across the country to increase the level of access to electricity.

16. STRATEGIES IN PLACE Demand Side Management • Energy efficiency and power loss reduction. • Some interventions include power factor correction, power loss reduction by Umeme whose target is to reduce losses. • Complete roll-out of pre paid metering, and use of efficient appliances.

17. INCREASING GENERATION CAPACITY SHORT TERM PROJECTS • Increase in capacity of Cogeneration plants • Kabale Peat 33 MW. • Addition of more Solar to the national grid

18. MID TERM PROJECTS • Small hydropower sites totalling over 150 MW have been studied and the development for some has commenced as financial closure is attained. These include: • Other mini hydros being studied = 150 MW.

19. LONG TERM PROJECTS a) Ayago Hydropower Project (600MW): • The detailed feasibility studies are being concluded by CGGC. • The project is expected to be developed as a Public Private Partnership. b) Orianga Hydro Power Plant (400MW) • The project is expected to be developed as a Public Private Partnership.

20. CHALLENGES • Infrastructure Gap in Generation and Distribution Capacity to achieve demand –supply • Financing Gap for the power sector • Need to increase access to Modern Forms of Energy. • The transmission and distribution infrastructure cannot support Power Trade in the region • High power losses. • Land acquisition AND Vandalism of power

21. CONCLUSION • Government has prioritized Energy Development as a high level issue for the country. • Government’s strategy to increase generation capacity involves private sector participation. • The policy and Legal framework is in place to promote the sector. • There are projects lined up to meet the growing demand. • Similarly, government is lining up projects to expand and extend the demand base across the country • There is need to fast track the development of these projects and do away with bottle necks.