Wednesday, September 24, 2008

Rural electrification lights up life in Uganda

New generating plant incorporating participation from the private sector is transforming life in rural Uganda. But there's a long way to go to satisfy all.

Publication: African Review of Business and Technology, 01-MAY-08

THE GOVERNMENT-RUN Rural Electrification Agency (REA) says its medium term goal is to connect 400,000 homes (10 per cent) in its rural electrification drive by 2012 and also ensure electricity access for the whole of Uganda by 2035. 

According to the current bi-annual newsletter of the Rural Electrification Agency, these goals will be attained by enhancing the available resource base for rural electrification by an average of US$40mn per annum and facilitating an average connection rate of at least one percentage point of the rural population annually. 

The Agency will also promote equitable rural electrification access on regional basis, establish and maintain a comprehensive rural electrification database to facilitate planning and promoting the institutional sustainability of REA. 

Inadequate funding 

REA, set up to promote and realize a scale-up in rural electrification, however notes that its major challenges has been inadequate funding and trying to get the private sector to invest in rural electrification projects as required by the World Bank modalities. 

"We need between US$400-500mn to be able to achieve the national target of 10 per cent rural electrification access by 2012. The private sector is very reluctant to put money upfront to invest in rural electrification projects," the executive director of REA was quoted in the newsletter as saying. 

"There is shortage of power in the system and it's therefore difficult to extend electricity to more new consumers even when those who are connected to the system do not have enough. Due to the low levels of electricity, everybody is crying out for electricity," he laments.

Mr Turyahikayo says they have promoted rural electrification including generation of power from small hydro resources in remote areas and have been able to attract some private sector interest in these projects and are also offered with subsidies from the Rural Electrification Fund. 

The official cites three private sector projects facilitated by the Energy for Rural Transformation programme and supported by the World Bank including Kakira Co-generation project expected to generate 20MW and feed 12 megawatts into the grid. 

The West Nile project which is meant for the electrification of part of West Nile covering Arua and Nebbi establishes a regional mini-grid and through WENRECO, an energy company and 1.5MW heavy fuel oil generator has been installed as the first phase of the supply of the area. 

A mini hydro project at Kisizi hospital is being upgraded from 60KW to 300KW and the agency has worked with other partners to attract investments worth about US$100mn in small renewable energy projects. 

REA is also helping to progress a project for electrification of Kasese and parts of northern Bushenyi and are about to embark on the implementation of about US$14mn project for grid extension financed by SIDA which will also be given out to private operators. 

"Recognising the low power supply situation in the country, we are putting emphasis on independent mini-grid systems mainly based on small hydro sites in remote areas and beneficiary communities will own and operate these systems," he adds. 

REA officials say they require between US$30 and 50 million annually to cover investments, strategies and various activities necessary for the effective implementation of the entire rural electrification programme. 

Since 2004, Uganda has been experiencing an acute energy crisis with only 135 megawatts generated out of the installed 300 megawatts from Nalubaale and Kira hydro plants. The electric power shortages has been attributed to delays in building new generation plants to meet the growing demand of electricity, the prolonged drought and inadequate finances to invest in large infrastructure power projects.