Uganda Energy Situation

Overview

Republic of Uganda
	Location Algeria.png
Capital	Kampala (0° 18′ 49″ N, 32° 34′ 52″ E)
Official language(s)	English
Government	Democratic Republic
President	Yoweri Museveni
Prime Minister	Apolo Nsibambi
Total area	236,040 km2
Population	32,369,558 (2009 estimate)
GDP (nominal)	$17.703 billion (2010 estimate)
GDP Per capita	$514
Currency	Ugandan shilling (UGX)
Time zone	EAT (UTC+3)
Calling code	+256

Energy situation

Uganda has total energy consumption of approximately 6 Mio. tons oil equivalent. As of 2007, Uganda has had one of the lowest per capita electricity consumption (44 kWh/year) in the world. An estimated 4.5 million out of 4.7 million households, have no access to electricity. The overwhelming majority of these un-served households are in the rural areas. About 72% of the total grid supplied electricity is consumed by 12% of the domestic population concentrated in the Kampala metropolitan area and nearby Entebbe and Jinja.

Biomass is still the most important source of energy for the 97% of the population. The share of 93% of total primary energy consumption coming from firewood, charcoal or crop residues, is one of Africa’s highest. Only 8.7% of all households use efficient wood stoves. Like most African countries, research, development and dissemination of efficient and modern biomass technologies are inadequate. It provides all the basic needs for cooking and water heating in rural areas and for most urban households. It is also the main source of energy for rural small and medium-sized enterprises and contributes significantly to the rural economy. The high usage of biomass in these sectors has been attributed to high prices of petroleum products, limited, inadequate and inefficient power supply systems arising from stunted generation capacity growth and a poor transmission and distribution infrastructure. A further 6% of energy consumption is accounted for by petroleum products, which are mainly used for vehicles and thermal power plants.

1% of the energy consumption is based on electricity. Electricity access in Uganda is very low with 10% at national level but only 3% in rural areas. Uganda currently has one of the lowest per capita electricity consumption (44 kWh/year) in the world (compared to India 300 kWh/year, China 580 kWh/year and USA 11,000 kWh/year in 1996). 

Access to Electricity in % of households in 2010 was 10% (1991: 5,6%; 2006: 9%). Approximately 1% of rural households use off-grid electrification technologies (usually diesel generators or solar photovoltaic systems).

The Energy Sector is one of the key sectors in the Ugandan economy. The sector provides a major contribution to the treasury resources from fuel taxes, VAT on electricity, levy on transmission bulk purchases of electricity, license fees, royalties, and foreign exchange earnings from power exports.

Significant public investment has been injected into the sector, particularly in the area of electricity supply. Following liberalisation, the power sub-sector is now attracting the largest private sector investments in the country. The sector is not only a vital input into other sectors, but also major source of employment for Ugandans. As of 2007, the total financial resources required to implement the strategic interventions was about US$ 1.84 billion. It is estimated that 68% of these resources will come from direct private investment while 32% will be obtained from the public sector either through Government resources or from development partners. For the same period the expected sector revenues is approximately US$ 2.3 billion.

The energy sector comprises the following supply sub-sectors:

• Power;
• Petroleum;
• New and Renewable Sources of Energy; and
• Atomic Energy.

Problem situation

Fuel wood is largely used for cooking in rural areas while charcoal provides the cooking needs for the urban population. At the same time, forests are depleted and overused in 30% of the rural areas leading to a severe lack of biomass for daily cooking needs. Currently only 7% of Uganda’s land area is covered with forest. The most affected is the tropical high forest, which has reduced from about 19% to a mere 3%. Firewood scarcity is a severe constraint in Western Uganda just like it is in the rest of rural Uganda. The land available is becoming scarce and households prefer to use the land for food crops rather than trees. Deforestation continues at a rate of 2,2% per year which leads to fuel wood scarcity in rural areas and price levels of charcoal and fuel wood in urban areas increasing at about 6% per year. In addition illegal cutting of trees increases. About 15-20% of the felling is used to produce charcoal, which is mainly used in urban areas. The production is carried out under primitive conditions with an extremely low efficiency (between 8 to 12% of the original energy). At the same time, households use biomass in a very inefficient way as the three-stone fire is still widespread. Urban and rural households are facing increasing energy costs or spend more time collecting firewood. Furthermore, the traditional use of firewood is responsible for high indoor air pollution levels, thus causing respiratory diseases that affect women and children in particular. Moreover, the latter spend many hours and travel long distances to collect fuel wood. This deprives women valuable time to engage in income generating activities and for children to go to school and study.

A total of 95% of rural households not having access to electricity are currently using traditional lighting technologies such as candles or kerosene lamps that give poor quality lighting, emit noxious fumes and present a hazard in terms of fires or burns (in particular for small children). Furthermore, the majority of social institutions (e.g. schools and health centres) in rural areas do not have access to electricity which leads to inferior health and education services in comparison with electrified institutions. Lack of access to electricity also severely constrains the economic development of rural areas of Uganda, preventing the establishment of certain businesses that require electric power or forcing companies to buy diesel or petrol generators that are costly to operate and have negative environmental impacts. Also job creation is being seriously constrained by the lack of adequate investment for the provision of rural infrastructure services, of which electricity is a key component. Lack of electricity also prevents access to information and communication technologies (e.g. mobile phones, computers, Internet). This contributes to further isolating rural areas from the rest of the country. Further, the quality of rural life is hampered by lack of electricity, particularly as rural public institutions such as health, educational and water facilities would be able to provide better services if they had access to electricity. As of 2007, Uganda Electricity Board (UEB) had well under 200,000 customers, the majority (128,000) of whom are in urban areas. UEB connects less than 10,000 customers per year, which implies that the country is losing the access race, as population growth adds 90,000 or more new households per year. Even under the best circumstances, with a restructured UEB, the rural access picture is unlikely to improve significantly. The irony is, a substantial segment of the un-served rural firms and households are willing and able to pay significant sums for electricity. Some rural households and businesses have resorted to self-provision of electricity, at a unit cost higher than would prevail in an organized, commercial delivery system.

In 2006, Uganda experienced unprecedented electricity deficit of about 105 MW, due to the prolonged drought, inadequate investment in least cost generation capacity and a relatively high load growth. This resulted in massive electricity rationing and forced the country to resort to expensive thermal generation. The government has put in place a comprehensive plan to address energy deficits and meet the long term energy needs.

Energy resources

Uganda is richly endowed with abundant energy resources which are fairly distributed throughout the country. These include hydro, biomass, solar, geothermal, peat and fossil fuels. The energy resource potential of the country includes an estimated 2000 MW of hydro power, 450 MW of geothermal, 460 million tonnes of biomass standing stock with a sustainable annual yield of 50 million tonnes, an average of 5.1 kWh/m2 of solar energy, and about 250 Mtoe of peat. In addition, an unspecified amount of petroleum has been discovered in the western part of the country.

Biomass

Biomass is the predominant energy type used in Uganda, accounting for 93% of the total energy consumption in the country and grew by approximately 3.6% between 1995 and 2000. Key forms used are; firewood, charcoal, farm residues and wood wastes. Charcoal is mainly used in the urban areas while firewood, agro-residues and wood wastes are widely used in the rural areas.
Firewood is used mainly in three-stone stoves in rural households and in food preparation by commercial vendors in urban areas. The same applies to the burning of farm residues. Firewood in some institutions like schools and hospitals is however used in improved stoves.
Charcoal is mainly used on a metallic stove traditionally known as a ‘sigiri’ though the use of the clay sigiri is picking up. The conversion of firewood to charcoal mainly uses earth mounds and pits, which give an average conversion efficiency of about 10% - 15%. Efforts to train charcoal burners have mainly been unsuccessful as most of them do it on an individual basis.

Biomass potential and distribution

Biomass supply comes from various sources among them the different vegetation and land use types. The major sources are: hardwood plantations which are mainly eucalyptus and indigenous species, woodlands which consist of woodland trees on average above 5m and have a canopy cover of over 40%, and bushlands which mainly consist of small shrubs occurring in open stands and subsistence farmland.
The total standing biomass stock is approximately 460 million tonnes with a sustainable biomass supply of 50.8 million tonnes. However, accessible sustainable wood biomass supply stands at 27.7 million tonnes.  When crop residues, whose theoretical potential in Uganda could be 4.4 million tonnes, are included, there is a national net surplus. The total amount of agricultural residue left after harvesting or processing of crops amounts to almost 11 million tonnes per year. The only business that utilizes biomass residues for energy production is the sugar industry. A small amount of coffee and rice husks is also utilized in heat production in cement and tiles manufacturing. Otherwise all residues are either used as a fertilizer and/or animal fodder.
In terms of overall wood biomass at national level, there is deficit of 85,000 tonnes, which can be covered by crop residues. At the regional level, there is a deficit of about 3 million tonnes in both the Central and Eastern Regions, while there is a surplus of about 4 million tonnes in the Northern Region and of about 2 million in the Western Region. Looking at districts, Kampala has the biggest deficit of over 2.5 million tonnes. Other major towns like Mbarara and Mbale also have significant deficits of 400,000 and 600,000 tonnes respectively. When the country is divided into surplus or deficit areas, only 26 districts have surplus biomass, while the remaining 30 have a deficit.
The wood biomass demand and supply scenario projects that in the next ten years, the country will move from a surplus to a deficit and later to an acute deficit. By year 2011, the deficit was estimated to be 10.7 million tonnes.

For information on challenges and issues affecting the exploitation of biomass in Uganda, click here.

Biomass stoves: best practice case study

Against the background of high deforestation rates and firewood scarcity in Uganda, the Ministry of Energy and Mineral Development, with the support of the German Technical Cooperation (GTZ) through the Energy Advisory Project (EAP), partnered with NGOs and the private sector to promote the improved Rocket Lorena Stoves for households and institutions. The rocket stoves for households have been modified to fit the socio-economic setting of the poor by using locally available materials that can be obtained cheaply or at no cost. More information on the strategy, which has been successfully used to disseminate over 175,000 Rocket Lorena stoves in Bushenyi and Rakai districts in Uganda since 2005, can be found here.

Hydropower

The electricity supply system in Uganda was developed during the 1950s and 1960s with the construction of the Owen Falls Hydropower Station (later renamed Nalubale Power Station) with 10 generators with a total installed capacity of 150 MW. Later the power station was refurbished and upgraded to 180 MW and a new one; Kiira with a capacity of 200 MW constructed. With the liberalization of the economy and the unbundling of the electricity utility, both Nalubale and Kiira hydro power stations were leased to Eskom (U) Ltd under a 20 year concession agreement. The two hydropower stations form the back bone of the electricity supply network in the country.
Two private companies, Kilembe Mines Ltd and Kasese Cobalt Co. Ltd, have their own smaller hydropower plants Mubuku I 5.4 MW and Mobuku III 10.5 MW. The stations were initially built to supply their own industrial activity, but due to the interruption in the copper and cobalt production activities, the companies entered into a contract with the Uganda Electricity Transmission Company in 2003 to sell power to the grid. Three other small hydro power stations Kuluva (120 kW) Kangando (60 kW) and Kisiizi (60 kW) supply electricity to isolated hospital grids. Kisiizi is being upgraded to 300 kW under the Energy for Rural Transformation Programme.
The country is faced with acute electricity supply shortage. Uganda’s total installed capacity is 630 MW, generated primarily from Owen Falls Dam at Jinja in the South Eastern Uganda (see Wikipedia "List of power stations in Uganda").  However, in 2009 only 140 MW (380 installed that time) could be used as a result of the low levels of Lake Victoria. The other cause of the electricity supply problems is that growth in demand for electricity hasnot been matched with new generation capacity. To alleviate this problem, the government has procured emergency thermal generators resulting in increase electricity tariff.

A new hydro facility has been developed at Bujagali, and is operational since February 2012. This installation will generate approximately 250 MW. Before Bujagali became operations 150 MW thermal capacities had been added in order to bridge the gap until strat of 2012. All big power generation plants belong to the Ugandan Electricity Generation Company Limited (UEGCL) but are operated and managed by ESKOM, Aggreko and other companies.(Two dams in Uganda are equipped with desilting gates and have proper plans for the management of upstream water and land use issues. However, there are no national plans for optimised operation of power plants under variable flow regimes). In the long term, four large hydro power stations will be constructed at Ayago North (300MW), Ayago South (200MW) and Kalagala (450MW) in 2012 – 2020 and Murchison falls (Uhuru – 300MW).

Hydro potential and distribution

Uganda has considerable hydro resource potential estimated to be over 2000 MW. The large-scale hydropower potential is along the White Nile which originates from Lake Victoria. The flow of the White Nile River is controlled by the Owen Falls Dam which was constructed in 1954. The water is released according to an “agreed curve” which is a relationship of the lake level and the flow representing the natural flow rate at Ripon Falls prior to the construction of the dam.
There are six potential hydropower sites along the White Nile. These are: Bujagali 250 MW, Kalagala 450 MW, Karuma (Kamdini) 150 MW, Ayago North 300 MW, Ayago South 250 MW and Murchison Falls 600 MW. Bujagali and Karuma sites have been significantly studied and the sites are being developed through on a Public Private Partnership (PPP) basis to generate electricity in the medium term (2007-2012).
The small and mini hydro sites are mainly located in the east and the western parts of the country which are hilly and mountainous. A total of 59 mini hydropower sites with a potential of about 210 MW have been identified through different studies. The level of studies is uneven with some sites having been studied to feasibility stage. Nevertheless, this gives a fair picture of the small and mini hydro potential in the country. Some of the sites can be developed for isolated grids and others as energy supply to the grid.

For information on challenges and issues affecting the exploitation of hydropower in Uganda, click here.

Solar energy

The level of solar energy utilization in Uganda is still very low. The use of solar PV began in the early 1980s mainly driven by donor funded programmes for lighting and vaccine refrigeration in health centers. Later the Uganda Railways Cooperation, a government parastatal, installed 35kW at 29 locations for communications and signaling. The Uganda Post and Telecommunications Cooperation also installed 30kW at 35 remote telecommunication sites through out the country. Some of the earlier initiatives included:

• PV systems installed by Uganda Rural Development and Training in Kagadi through a credit scheme supported by a Dutch organization Humanist Institute for Development Cooperation (HIVOS).
• Habitat for Humanity and Solar Electric Light Fund funded by the US Department of Energy installed 125 solar home systems to low income families in Kasese.
• Solar Energy Uganda Ltd in partnership with Solar Light Churches for Africa installed a number of PV systems. However, the efforts were uncoordinated and lacked after sales support.

In 1998-2003, the Government with funding from UNDP and GEF implemented the Uganda Photovoltaic Pilot Project for Rural Electrification which was aimed at removing barriers to the wide spread use of solar PV. The project created awareness, built the capacity of the private and arranged financing for vendors and end-users among other things. As a result, the solar PV industry has become vibrant. Although no comprehensive study has been under taken, it is estimated that over 20,000 systems are installed in the country.
In 2001, the Government put in place a Rural Electrification Strategy and Plan (RESP) which will among other things increase the use of solar PV in rural areas. The RESP has a target of 80,000 PV systems by 2012. As part of the rural electrification program, Energy for Rural Transformation (ERT), supported by the World Bank, the Private Sector Foundation is implementing sales based performance subsidy scheme and providing business development support to private PV dealers which is expected to increase PV sales. Under the same programme, the Ministries of Health, Education, and Water and the Uganda Communication Commission have procured PV systems to meet their sectors' electricity needs. The Ministry of Health procured 568 PV systems for health centers under ERT phase 1 and the Ministry of Education 458 solar systems for 129 post-primary institutions in 10 districts.
The number of solar thermal systems installed for hot water is very low, estimated to be less than 500 countrywide. There has been no major Government initiative for promoting solar water heaters in the country although in 2007, the government planned a pilot project with support from REEEP expected to install 45,000 solar water heaters by 2012.
According to the Alternative Resources Assessment and Utilisation Study, the total potential for solar water heaters is estimated at 161,000 m2 of collector. A substantial growth in the economy may lead to a much higher demand than assumed if only 10% of urban households demand hot water.

Solar potential and distribution

The average solar insolation is 5.1kWh/m2/day. Existing solar data clearly indicates that the solar energy resource in Uganda is high throughout the year. The data indicate a yearly variation (max month / min month) of only about maximum 20% (from 4.5 to 5.5W/m2), which is due to the location near the equator. The insolation is highest in the dryer area in the north-east and very low in the mountaineous areas in the east and south-west.

For information on challenges and issues affecting the exploitation of solar energy in Uganda, click here.

PV: best practice case study

Against the background of low electrification rates, particularly in rural areas, the Uganda Ministry of Energy and Mineral Development with financial support from UNDP and GEF implemented the Uganda Photovoltaic Pilot Project for Rural Electrification (1998-2003). The main objective of the project was to provide basic electrical services through solar PV to rural areas unlikely to have access to grid-based electricity in the foreseeable future. More information on the project can be found here.

Wind energy

Due to its geographical location, Uganda does not seem to benefit from good wind resources with most areas having wind speeds less than 3.0 m/s. The wind data collection from the national meteorological stations was never done with the intention of monitoring wind speeds for energy utilization. It was primarily for weather forecast and aviation. The standard height for the location of measuring equipment is two metres above the ground and the sensors are often placed close to obstacles. No substantive investigation in the area of wind energy has been carried out in Uganda to characterize the wind distribution. It is possible that some sites could have enough wind speeds to generate substantial amount of electricity.

Wind potential and distribution

Based on wind data collected at 11 sites in three years (1989-1992) by the Department of Meteorology, Ministry of Water, Lands and Environment, the wind speeds in most areas of Uganda are moderate with average speed not exceeding 2 m/s.
In some areas with complex terrain, the wind may speed up due to slopes of hills, escarpments and tunneling effects. In the mountain areas in the south-western part towards the border with Rwanda (Kabale, Kisoro, Ntungamo) and in the area around Mt. Elgon the average wind speed goes up to about 4 m/s.
Measurement carried out under the Alternative Energy Resource Assessment and Utilisation Study at two sites for five months (June-Sept 2003) indicated that the average wind speed at Kabale and Mukono at 20m was 3.7m/s.
The study concluded that the wind energy resource in Uganda is insufficient for large scale electricity generation. However, the wind resource may be suitable for special applications, such as water pumping in remote areas and for small scale electricity generation in mountainous areas.

For information on challenges and issues affecting the exploitation of wind energy in Uganda, click here.

Fossil fuels

As of 2007, consumption of petroleum in Uganda stands at 800,000 m³ per annum growing at about 6% per annum since 1997. The petroleum import bill stands at US$ 250 million per year. This constitutes about 8% of total national imports and represents slightly above 20% of total export earnings.

Uganda imports all its petroleum products requirements from overseas since there is no local production yet. About 90% of Uganda’s petroleum imports are routed through Kenya with only 10% coming through Tanzania.

For more information on the fossil fuels resources in Uganda, click here.

Electricity transmission and distribution

Transmission

The Uganda Electricity Transmission Company Ltd. (UETCL) is the bulk supplier and single buyer of power for the national grid in Uganda. It is the purchaser of all independently generated power in the Country and it also imports electricity from neighbouring countries. UETCL is also responsible for publishing standardized tariffs for renewable energy generation of up to 20 MW capacity based on the avoided cost principle.The length of domestic transmission and distribution lines is14312 km.

Distribution

The biggest company empowered to trade and supply electricity at 33kV and below is Umeme Ltd, leased the assets of the formerly government owned distribution company (Uganda Electricity Distribution Company Ltd). There are some mini-grid distribution systems and one off-grid generation and distribution company (West Nile Rural Electrification Company Ltd).

Policy framework

Energy policy and poverty reduction strategy

The goal of the policy is to meet the energy needs of the Ugandan population for social and economic development in an environmentally sustainable manner.

The energy policy seeks to meet the following broad objectives:

1. To establish the availability, potential and demand of the various energy resources in the country

To meet this objective the Government shall:

• Prepare a database on all the available energy resources and energy consumption patterns in order to have a long term perspective of the options for demand/supply matching; and package information on potential projects for investment.
• Build the necessary local capacity to acquire the required data and assess and evaluate the resources.

2. To increase access to modern affordable and reliable energy services as a contribution to poverty eradication

 To achieve this objective the Government shall:

• Attract private capital and management in the energy sector; promote competition between energy service providers; promote the development of markets in energy technologies and services.

• Put in place a conducive environment to accelerate rural energy supply and access by:

1. Applying subsidies exclusively on capital investment;
2. Applying light-handed regulation to facilitate investment in rural energy projects
3. Having differentiated tariffs for different areas or projects to reflect investment and supply costs;
4. Exploring schemes to assist consumers to purchase appliances, thereby increasing the speed at which the load of new consumers matures; and
5. Formulation of guidelines on organising rural communities to enable them access better provision of energy services

• Intensify provision of consumer information, education and technical advice in the use and conservation of energy.

• Work with financial institutions to establish sustainable financing mechanisms for energy programmes.

3. To improve energy governance and administration in order for the energy sector to operate efficiently and play its role in the socio-economic development of the country.

To achieve the above objective government shall:

• Clarify the roles and functions of the various institutions involved in the energy sector increasing the role of the private sector and other NGO’s and communities;
• Create a transparent legal and regulatory framework for the sector;
• build capacity at the national and local levels for better formulation and implementation of energy policies and programmes;
• Build the capacity of regulatory agencies to provide even handed and predictable regulation;
• Develop incentives to retain local human resource for the energy sector; and
• Involve all stakeholders in the formulation of new policies in the energy sector

4. To stimulate economic development by ensuring that energy plays a central role in the economic development of the country and in the region.

To achieve the above objective government will adopt the following strategies:

• Encourage competition within the energy markets to achieve efficiency.
• Attract investments in energy services provision by providing appropriate incentives.
• Ensure energy supply security and reliability.
• Promote energy trade within the region.

5. To manage energy-related environmental impacts

Government will ensure that environmental considerations are given priority by energy suppliers and users to protect the environment and put in place a monitoring mechanism to evaluate compliance with established environmental protection guidelines.

To meet the above objective, Government shall:

• Promote the use of alternative sources of energy and technologies which are environmentally friendly;
• Sensitise energy suppliers and users about the environmental issues associated with energy;
• Work towards the establishment and acceptance of broad targets for the reduction of energy-related emissions that are harmful to the environment and energy users;
• Promote efficient utilisation of energy resources; and strengthen the environment-monitoring unit in the energy sector

Energy is an integral part of the Ugandan Government’s Poverty Eradication Action Plan (PEAP) which includes frequent references to thelink between energy and poverty alleviation. The Ugandan Government has set the target of providing 10% of rural population with access to electricity until 2012. This target has been specified in the Rural Electrification Strategy and Plan as well as in the PEAP. It is planned to be achieved by grid extension (including through private sector involvement), mini-grids and stand-alone electrification systems. Furthermore, the government has stated its commitment to increase the use of renewable energy from 4% today to 61% in 2017 as outlined in the Renewable Energy Policy (March 2007).

In April 2010, the Government of Uganda launched the National Development Plan (NDP), which covers a number of energy issues. One of the objectives of this plan are increased access and consumption of electricity for growth, employment and socio-economic transformation. Limitations of the forestry sector and their impacts on the country's development are elaborated as well as challenges of the power sector. In consequence, the NDP highlights the following strategies to overcome the barriers of the energy sector towards achievement its goals: Increase power generation capacity to reach 780-820 MW, mainly through large and small hydro; increase rural electrification from 6 % to 10 % by, among others, subsidization of mini-grids; promotion of energy efficiency, reduction of power losses from 40 % to 16 %; revision of existing policies in the energy sector and promotion of renewable energies, esp. biomass and solar. 

In addition to the technical and financial assistance from Germany Uganda’s energy sector is supported by the World Bank, Norway, ADB and to a lesser extent by Japan, Denmark and the European Community.

The World Bank has provided loans for three major projects in the area of energy supply: the Energy for Rural Transformation (ERT) for USD 84 million (up to 2012); the Uganda Power Sector Development Project for USD 300 million (up to 2011) and the Private Power Generation Project (Bujagali) for USD 115 million (up to 2017). The main objective of the Private Power Generation project is to provide least-cost power generation capacity that will eliminate power shortages at the time of its commissioning. The Power Sector Development Operation Project is to reduce short-term power shortages and financial imbalances, and facilitate orderly longer-term expansion of electricity service. This also comprises a set of investments and policy measures designed to reduce the supply-demand gap until the Bujagali hydropower plant comes into service in 2011 as well as financial support for the Government to absorb a part of the higher oil prices.

Institutional set up and actors in the energy sector

Public institutions

There are three main governmental institutions dealing with renewable energies for power generation:

• The Ministry of Energy and Mineral Development (MEMD) is the lead agency in the energy sector. The Ministry is responsible for policy formulation, promotion, coordination, monitoring and evaluation. MEMD is also responsible for initiating legislation in the energy sector. Ugandas National Energy Policy is so far centralized, i.e. there are no energy officers at sub-national/district level. Part of the MEMD is the Energy Department (ED), which is structured according to sectors. ED comprises four divisions “Energy Efficiency”, “Innovative and Renewable Energies”, “Electricity” and “Provision with Oil Products”.
• Rural Electrification Agency (REA) functions as the secretariat to the Rural Electrification Board, which realizes MEMD`s rural electrification plans as stipulated in the Indicative Rural Electrification Master Plan. REA controls public funds as for the subsidization of rural electrification projects.
• Electricity Regulatory Authority (ERA), which was established by the Electricity Act of 1999, is in charge to issue licences for the generation, transmission, distribution or sales of electricity. ERA has also the mandate to establish a tariff structure and investigate tariff charges and approve the rates of charges. 

Projects implementing NGOs

Energy is generally a side topic for most Ugandan NGOs. However, there are several NGOs with certain experiences in the field of the introduction of improved stoves.

Commercial service provider

In the field of photovoltaic systems about 25 providers work in Uganda. The Solar companies in general have difficulties to develop markets in rural areas and focus their interest on urban areas.

In the field of stoves there are numerous workshops and craftsmen producing stoves especially for the urban market. Part of these workshops and craftsmen were trained by the EnDev-Uganda programme.

Key problems hampering access to modern energy services in rural areas

Obstacles for grid based rural electrification

The Government of Uganda has limited resources for extending the grid to rural areas.  At the moment, the Government’s focus is on solving the power supply crisis that is crippling the national economy. Based on an improved power generation it will concentrate its efforts to extend the grid to major urban and periurban areas.

Tariff rates for customers differ according to the category of client. They reflect the cost of electricity supply to that category. Implementation of this principle eliminates cross-subsidization of any category of customers by other categories. As a result, the tariff for domestic consumers is relatively high with 0,17 € per kWh (426 U. Shs). This tariff is often higher than the tariff for industrial consumers because domestic consumers who take supply at the low voltage impose higher investment and operational costs on the system than industrial consumers who are supplied at the high voltage or medium voltage.

For Umeme ltd. it is generally profitable to extend the grid. However, poor households cannot afford the connection fee and the electricity costs. In addition, collection costs are high in areas with dispersed population and low numbers of clients. Prepaid meters are not common in Uganda.

Beside Uneme, private companies invest only in exceptional cases in minigrids. Normally, costs of providing access are too high due to remoteness of the sites, dispersed populations and difficulty of the terrain. Local communities don’t dispose of sufficient proper financial resources to make infrastructure investments in their community.

Obstacles for off grid energy technologies and services

There is strong political motivation to improve access to electricity of rural populations, particularly those remote from the grid. However, in the case of SHS both the affordability and the availability were seen as major problems for the dissemination of the solar systems in rural areas. In the case of hydropower, the investment costs are generally not affordable for rural communities and investors. In addition, there is a lack of management skills to operate MHPPs.

Generally, the availability of micro-finance schemes for energy technologies in rural areas is limited. Large parts of the country have almost no access to institutional micro-finance services and must rely largely on moneylenders, suppliers, family and friends for short term seasonal loans. There are no secure liquid savings options available to these households, which would enable them to build assets over time. Existing micro-finance institutions often have a narrow credit product line, limited experience in rural markets and a lack of access to best practice information and technical tools. In addition marketing and maintenance structure for energy technology devices in rural areas are weak. Almost all retailers are established in the big cities with no outlets in rural communities. Thus, clients have to travel to cities to purchase energy devices and for repair orders, which is difficult for most rural families. Establish rural outlets are considered not to be profitable due to the high costs for transportation and mobilization, the dispersed nature of the populations and the low income and low demand of the local population.

Links to further reading

• Centre for Research in Energy and Energy Conservation (n.d.). Northern Uganda Energy Situation.
• Ministry of Energy and Mineral Development 2002, The Energy Policy for Uganda, Kampala, September 2002
• Ministry of Energy and Mineral Development 2001, Rural Electrification Strategy and Plan.
• Kamfor Company Ltd 2006, Report on the Renewable Energy Resource Information Development and Capacity Building Assessment In Uganda, Ministry of Energy and Mineral Development, Kampala, January 2007.
• Ministry of Water, Lands and Environment 2002, The National Forest Plan, October 2002
• Kennedy & Donkin Power Limited 1996, The UEB Hydropower Development Master Plan – Part 1, Volume 2 Main Report, Kampala November 1997.
• Kennedy & Donkin Power Limited 1996, The UEB Hydropower Development Master Plan – part 1, Volume 7, Hydrology and Hydropower Potential of Non-Nile Rivers, July 1996  .
• Sweco International 2001, Evaluation of Hydropower Potential Sites in Uganda with Capacity in Range of 0.5 – 50 MW, Kampala, March 2001.
• Electrowatt-Ekono Oy – Norplan AS, COWI A/S 2003. The Uganda Alternative Energy Resources Assessment and Utilisation Study, Kampala, June 2003.
• Electrowatt-Ekono Oy, NORPLAN A.S and COWI A/S (2004): The Uganda Alternative Energy Resources Assessment and Utilization Study AERDP Main Report Phase 1, Kampala, February 2004
• Ministry of Energy and Mineral Development 2006, Plan for Meeting Uganda’s Electricity Supply Needs In The Short, Medium And Long Term, Kampala June 2006.
• United Nations Development Programme (1998), Uganda Photovoltaic Pilot Project for Rural Electrification, Project Document, Kampala 1998.
• B. Banks and G. Kihuguru (2006), Uganda Photovoltaic Pilot Project for Rural Electrification UGA/97/G32 Ex-Post Evaluation Report, UNDP, Kampala, May 2006.
• Pallabazzer, R.: The Wind resources in Uganda. Renewable Energy, Vol 13, no 1, pp 41-49, 1998.

References

Sources page