Uganda: New solutions sought in the wake of outages (The Africa Report n°39 – April 2012)

Much remains uncertain about when new hydro projects will come fully online and with how many megawatts. The government is looking at new energy sources, possibly even nuclear.

Numbers dominate any discussion about Uganda’s power sector. Government figures show that an estimated 18% of the country’s 30 million people have access to the national grid.

The ruling party’s strategy is to make Uganda a mid-level industrial country by 2020. A reliable, multi-sourced energy sector is seen as central to this goal. Energy Minister Irene Muloni has put the sector output target at 3800MW, through a strategy of attracting large-scale investment for the development and operation of energy facilities leased from the state.

Uganda s power supply is dominated by hydro. The country generates 180MW from the original pre-independence Nalubaale Dam (previously « Owen Falls »), plus 20OMW from the dam’s 2003 turbine extension, known as Kiira. Three diesel generator firms also feed 50MW each into the grid, while an estimated 20MW comes from an assortment of privately owned biomass sites and micro dams. In the pipeline is another 250MW from the delayed Bujagali Dam. In early March, even a first 50MW from one of its five turbines had not begun. Excluding Bujagali, this should provide a total of over 500MW. In practice, the grid receives about 350MW, against an estimated demand of 445MW. This gap has led to rationing and, more recently, price hikes of 40% to 70% after the annual $300m subsidy to diesel generator firms – to which the government was in arrears by $73m – was whisked away in January.

In the past, electricity transmission and distribution used to be one operation run by a state behemoth known as the Uganda Electricity Board (UEB). Its transformation into four separate entities was a World Bank-backed policy aimed at overcoming the UEB’s shortcomings.

Public outcry. Did anything go wrong? Uganda’s parliament seems to think so, after 2011 saw the country wracked by civil disturbances over the rising cost of living. It set up an ad hoc Committee lnvestigating Misconduct in the Energy Sector. Trapped between rising interest rates, expensive generator fuel and high import taxes, the country’s ubiquitous small trader class cited the new outages – which sometimes lasted for days in a row – as the last straw.

Meanwhile, former energy minister Hillary Onek accused energy technocrats of « duping » President Yoweri Museveni into believing the new Bujagali Dam would produce 250MW. A trained engineer, Onek analyzed problems with the water flow and pressure needed to drive the turbines, and said whatever output capacity the new dam could muster would not bring down tariffs.

Finger-pointing. Another government minister Aggrey Awori insists whatever the technical problems, it is the sector-reform plans that were flawed at conception: no investor will have pockets deep enough to keep the retail end afloat. An expensive yet poor- quality power supply was the only possible outcome, and is the reason Ugandans now pay the highest prices in the region for the least-reliable service offering the smallest consumer reach.

The government insists that the high prices are a problem of volume, and has long blamed the country’s tiny environmentalist lobby for teaming up with its global counterparts and snarling up international financing deals for the still incomplete Bujugali Dam.

President Museveni remains upbeat that with the impending oil revenues, the kinks in energy supply will be ironed out. Construction is due to begin in July on a 600MW hydroelectric dam – to be fully financed by oil revenue – at a site hundreds of kilometers downriver at Karuma. The president also created a frisson in January by announcing to parliament his intention to develop nuclear energy using Uganda s uranium deposits.

Kalundi Serumaga in Kampala

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