Hydro resources are abundant in Uganda, especially along the Nile and to date only 320MW capacity of hydro projects have been installed (and only 16.7MW of these are small hydro power (SHP)). At the same time, the electrification level of the 25M population is very low with only 1% electrified in rural areas.
Uganda also has an enormous potential from its mini-hydro energy resources in non-Nile sites, which have not been fully exploited and can be developed for independent grids to supply power in isolated areas of the country. A recent report from the Ugandan Renewable Energy Association, summaries available information from reports on some of potential mini-hydro sites for development.
EnDev Uganda is currently implementing severel micro hydro power (MHP) and pico hydro sites.
Small Hydro Power (SHP) Policy in Uganda
The power market in Uganda has opened up, making it easier for the private sector to participate. Power generation, transmission and distribution used to be the monopoly of Uganda Electricity Board (UEB). Under the Electricity Act, 1999, of the Power Sector Reform and Privatization Strategy, the Electricity Regularity Authority (ERA) was established to regulate generation, transmission, distribution, sale, export, import and supply of electric energy.
A key component in the Power Sector Reform has been a new regulatory system, undertaken by the ERA, which will promote competition for the generation and marketing of electricity by enabling third parties to connect to transmission systems and utilise these assets. A tariff structure has been formulated and the charge rate and terms and conditions of electricity services provided by transmission and distribution companies investigated.
The non-Nile mini-hydro sites are available on about 71 rivers, identified in a detailed inventory (supported by the Royal Netherlands Embassy and ADB) having good potential for power production. The total capacity of these sites is about 200MW. Only a few have been developed for small power supply schemes.
Financing Small Hydro Power (SHP) in Uganda
Although recent studies indicate that the market for SHP in Uganda is indeed strong, a key concern for Ugandan SHP projects will be on the financing aspect. Access to public sector funding for SHP is more important in Africa than in other regions, as there has been a marked decrease in international lending to African nations ($1B in the mid-1990s to $100M in 2002). Public-private co-operation with bilateral concessional funding is a model that has been suggested for Uganda and could also apply to many nations of the continent.
Uganda has also seen the benefit of the CDM in providing additional financing for SHP, with projects supported by the Prototype Carbon Fund (PCF), which will buy the carbon emission reductions. Two plants of 5.1 and 1.5 MW have recently been built and operation of the projects and management of the carbon abatement is being handled by a private company (Ilskog, 2004).
A German SHP turbine-manufacturing firm have recently proposed that mini-hydro power stations (between 1 - 1,000kW of power) that do not need dams to operate, have a strong potential to supply rural areas in Uganda to ease the high demand on the national electricity grid, which has generation capacity falling short of demand by 120MW in the evening peak and 25MW during the day (African Energy 2005).