When the Yoweri Museveni led National Resistance Army (NRA) marched onto Kampala in January 1986, they took over a city that was poorly lit, its darkness not quite different from the bushes of Luwero they had emerged from.
Less than 5% of the country’s households had access to electricity.
The Owen Falls Dam in Jinja, virtually the country’s only source of electricity, in operation since 1953, had fallen into disrepair, producing only 60 MW of its installed capacity of 150 MW. The Uganda Electricity Board (UEB) the state enterprise that ran the dam and the associated transmission and distribution network was falling under its own weight and inefficiencies. Such was the inefficiency that I collected only a quarter of power sold and billed.
Uganda’s population had since doubled to 14 million in 1986 without a corresponding increase in power generation capacity, which means in real time, Uganda’s generation capacity – the degradation of Owen Falls Dam notwithstanding, had fallen precipitously too.
Point number five of the National Resistance Movement’s (NRM) Ten-Point Program, the ‘manifesto’ for a new Uganda, spoke about an aspiration to develop an “independent, integrated and self-sustaining national economy”. Under this agenda, the NRM aspired to push for aggressive industrialization to add value to our natural resources, create jobs, sustain livelihoods and well as increase export earnings and overall, increase household incomes.
To power this ambitious plan, the Museveni-led NRM government recognized the need to build a sustainable power sector both to power these industrialization dreams, but also as an export of its own.
“Uganda is particularly rich in agriculture (we could feed much of Africa as far as maize, millet, sorghum, rice, wheat, bananas, cassava, beans, peas, groundnuts, etc. etc. are concerned) apart from the export crops of coffee tea, cotton, tobacco, as well as fisheries and hydro-electric power,” reads, an extract from the NRM government’s blueprint.
The document also singled out electricity exports as a potential export revenue earner, provided the country’s energy infrastructure, was revamped and ramped up.
“This (electricity) is an export that is much more reliable than coffee…. In fact, the Jinja dam with reinforced capacity could supply power, not only to Kenya but also to North Western Tanzania, Eastern Zaire and Southern Sudan, thereby earning a lot of foreign exchange for Uganda while saving Uganda’s neighbours the cost of trying to get electricity from more costly sources. With cheap power in Uganda, agriculture and fisheries in all the three countries and minerals like iron-ore and coal in Tanzania and a big market, a basis for industrialisation would be created,” the NRM then-quasi manifesto reads.
Museveni, as the leader of the NRM, had identified a lack of electricity to power industry and improve the general living standards of Africans in general and Ugandans in particular as a major bottleneck. What he may not have counted on is the long and complicated road it would be to just match demand in the war-ravaged country.
Regardless, through baby steps, starting with the late 1990s reforms in the electricity sector and the subsequent creation of the Electricity Regulatory Authority in 2000, the sector has grown and with some exports too!
Today, there are a total of ERA 67 licensees involved in the generation, transmission and distribution of electricity. Most of the licensed projects are complete and operational while others are still in the development stage. Total installed generation capacity has grown from 404.4 MW in 2000 to 1268.9 MW as of October 2020 and by mid-2021, this is expected to rise to 1868.9 MW.
Worth noting is a diversified generation mix consisting of four (4) different sources, namely: Hydro (1,023.59 MW), Thermal (100 MW), Cogeneration (63.9 MW) and grid-connected solar (60.8 MW). This is a departure from the over-reliance on Hydropower as was the case 20 years ago. There are also prospects of power generation from wind and associated excess gas from the country’s oil and gas fields in the Albertine Graben.
As a result, the number of households with electricity has grown to about 24% from about 5% in 1990. The percentage of the Ugandan population with access to electricity now stands at 51%.
Uganda exports some electricity too. According to ERA statistics, 242.8 GWh of electricity, or 5.8% of all power produced was exported to Kenya, Tanzania, Rwanda, and the Democratic Republic of Congo (DRC), earning the sector and the country some foreign exchange.
Looking back—President Yoweri Kaguta Museveni’s role in shaping Uganda’s power sector
Although by the time the NRM government came into power, the government before it, had in 1985 committed $73.4m to expand the capacity of the Owen Falls Dam from the installed 150 MW to 180 MW, it would not be until 1996 that this work was finished. But by this time, due to improved security and corresponding economic growth, electricity demand had already outstripped the available supply.
In 1991 Uganda had also contracted a Chinese contractor, SIETCO to build a new 200MW Owen Falls Extension dam, however, this contract was terminated in 1996 when the contractor failed to deliver. Subsequently, the contract was awarded to Impregilo-Salini, an Italian construction firm that eventually finished the extension project in 2000 giving some much-needed relief.
Meanwhile, to attract investment into the country, the government had in 1999, decided to unbundle UEB and create efficiencies in the sector.
The resultant entities – Uganda Electricity Generation Company Ltd (UEGCL), Uganda Electricity Transmission Company Ltd (UETCL) and Uganda Electricity Distribution Company Ltd (UEDCL), have shown an improvement in service delivery through specialization. All but UETCL had their assets passed on to private sector players who have sunk.
The Electricity Regulatory Authority (ERA) was also formed to regulate the sector. Dr Ben Zedde Dramadri was appointed as ERA’s founding board chairman (February 2000-2010). Dr Frank Ssebowa, a Ugandan engineer was the Authority’s first CEO, running the organization from October 2001-October 2012.
ERA would be handed its first real test during the 2004/05 power crisis. The crisis was caused by a combination of hydrology and climate issues that saw an extreme reduction in generation in the country’s dams to an average 150MW down from an installed capacity of 380MW. ERA had to lead the sector through improvised emergency licensing of 100 MW of thermal power and 87 MW from a mix of HFO and bagasse.
During the 2006 Uganda Manufacturers Association’s International Trade Fair, at Lugogo, President Museveni assured manufacturers that Uganda would never have another electricity crisis. “This is the last energy crisis we shall have in Uganda, even for the future. This issue of electricity in the next three years shall be history. We have learnt enough lessons,” he is quoted as saying in the Daily Monitor.
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At the time, the government of Uganda had restarted the stalled development of the 250MW Bujagali Dam, this time with a new consortium, Bujagali Energy Limited, a joint venture between Sithe Global Power LLC, from the United States, and Industrial Promotion Services, a division of the Aga Khan Fund for Economic Development, and was tasked with developing the project. Construction of the dam and powerhouse started in June 2007 and was completed in 2012.
With the completion of Bujagali in 2012, the country, for the first time in 30 years, had its electricity supply, overtake demand. That’s not all. Bujagali’s commissioning in 2012 allowed the government to retire more than 100 megawatts of diesel power plants and made it possible to nearly eliminate government subsidies to the electricity sector. More than 90 per cent of Uganda’s electricity generation mix was now from renewable sources, making the Ugandan power grid one of the cleanest in the world.
Uganda may have had excess power supply versus the registered demand for the first time in a long time, but another issue reared its ugly head. Because of the Public-Private Partnership (PPP), Uganda with Bujagali Electric Company (BEL), the cost of power was uncomfortably high to take care of the cost of finance and the return-on-investment target BEL had.
Once again, Museveni pushed for a refinancing of the Bujagali dam to make it more sustainable. In July 2018, a consortium of development finance institutions and commercial lenders completed the refinancing of more than USD400 million loans of Bujagali Energy Limited (BEL), extending the tenor of the bulk of the senior and subordinated loans originally provided in 2007. This extension reduced BEL’s annual debt-servicing payments and made it possible for the company to reduce the cost of electricity produced by the hydropower plant. The move was hailed as an innovative approach and one of the first to be implemented in Sub Saharan Africa.
As a result, the cost of power was reduced from 9 cents to 8 cents and from 16 cents to 9.8 cents for extra-large and large industrial consumers respectively. These two categories of consumers, combined, use about 38.3% of all power produced in the country.
Government targets to further bring down this to US Cents 5 for all manufacturing consumers, including medium industrial and commercial consumers, whose bulk are cottage industries and SMEs that employ the majority of Ugandans.
“The cost of electricity per unit has been US cents 8-9. I intend to bring it to US cents 5 per unit for manufacturers, big or small,” the President said in his New Year message in 2019.
The President argues that with lower power tariffs heavy industry and processing can be more viable in Uganda.
Investing ahead of the demand curve
However, Bujagali’s positive impact on the energy sector would be short-lived, if more investments were not made into the sector. Precisely it was projected that if nothing was done, load shedding would set in again from 2014 until 2018.
Therefore, in May 2013, the Government of Uganda and the Electricity Regulatory Authority (ERA), in close cooperation with Germany’s KfW Development Bank, launched the Global Energy Transfer for Feed-in Tariff (GET FiT) Programme with support from the Governments of Norway, the United Kingdom, Germany and the EU through the EU Africa Infrastructure Fund. The main objective of the GET FiT Programme was to assist Uganda in pursuing a climate-resilient low-carbon development path through developing 17 small-scale renewable energy (RE) projects, promoted by private developers and with a total installed capacity of 158 MW.
To date, 14 of these power projects are operational, consisting of 11 small hydropower projects (SHPs) with a combined installed capacity of 82.4 MW, two solar PV projects with a combined installed capacity of 20 MW, and one bagasse co-generation project with 20 MW installed capacity.
Other than successfully warding off the projected load shedding, these GET FiT projects together with the successful development and commissioning of Isimba Dam whose construction began in April 2015 and was completed in January 2019, have also reduced the cost of electricity generation, in line with ERA’s least-cost generation strategy. For example, the small hydros were able to deliver electricity 20% cheaper and the Solar PVs at 30%.
Thinking big; thinking nuclear
As the country awaits the going live of the 600MW Karuma dam as well as several other power projects under various stages of development, such as Ayago (840MW), Oriang HPP (392MW), Kiba HPP (330MW and Muzizi (48 MW) the country also has its eyes on nuclear power.
Government estimates show that to meet the Vision 2040 targets of increasing the per capita electricity consumption to 3,668 kWh and attain coverage of 80% of Uganda’s households, Uganda will have to ramp up its generation capacity to at least 41,738 MW by 2040.
Estimates from ERA show that Electricity Generation Capacity is projected to double from 1182 MW in F/Y 2018/19 to 3,500 MW in 2025 while household access to electricity is set to increase from 24% to 60%. This, therefore, means that in the 15 years between 2025 and 2040, Uganda must generate more than 35,000 MW of fresh electricity. By this time, most of Uganda’s hydro potential will have been used up, making nuclear the next most sustainable source of mega power.
Thankfully, the government is already nuclear facing. In 2008, the Atomic Energy Council was established by the Atomic Energy Act, 2008 to among other functions explore ways of producing cheap electricity, using nuclear power.
Explaining why nuclear, is an important component in Uganda’s energy mix, President Museveni, speaking at the 2009 UN Security Council nuclear non-proliferation and nuclear disarmament meeting, said that nuclear presented the most sustainable electricity generation opportunity to Uganda and Africa at large.
“I want to inform this Security Council that Africa is interested not in nuclear weapons, but nuclear energy. The reason we are interested in nuclear energy is that if you take all the rivers in Africa, their total capacity of hydropower there is about 300,000 megawatts. We are going to be 1.3 billion Africans by 2020. Now, if you take the United States, which are only 300 million people, they are using 1 million megawatts. But all the rivers in Africa have got a potential of only 300,000 megawatts. Even if all the sites on the African rivers were developed, we would not have enough electricity to support the Africans. Unless of course, you say that it has been scientifically proved that Africans don’t need electricity. … nuclear energy is of great interest to Africa,” he said.
The government, in September 2019, also said that it had signed an Inter-Governmental Agreement (IGA) with Russia to help it build capacity to exploit nuclear technology for energy, medical and other peaceful purposes. This was a second IGA after another, signed in May 2018 with the China National Nuclear Corporation (CNNC).
During the June 2019 State of Nation Address, Mr. Museveni, told the country that the government has completed pre-feasibility studies for a 2,000MW Nuclear Power Project following the identification of eight (8) potential sites for nuclear power plants in the Districts of Buyende, Kiruhura, Lamwo, Mubende and Nakasongola.
