The Electricity Regulatory Authority (ERA) has suspended licensing of new grid-connected solar photovoltaic (PV) and wind power projects.
The suspension originates from concerns over the national grid’s current capacity to absorb additional variable renewable energy (VRE).
The decision, published in the Uganda Gazette of October 24, 2025, imposes a temporary halt on new grid-tied renewables. This continues until the completion of the grid stability assessment.
Projects worth an estimated $230 million are affected. These include solar developments planned in Gomba (20 MW), Amuru (150 MW), Nebbi (20 MW), Moroto (20 MW), Luuka (20 MW), and Nakaseke (100 MW).
The notice, signed by Eng Ziria Tibalwa Waako, ERA’s Chief Executive Officer, invokes the Electricity Act. It mandates taking measures necessary to maintain grid reliability and security.
Why ERA put a pause
Behind the suspension lies a growing concern that Uganda’s power grid, though expanding, has reached its safe technical limit. This concerns intermittent sources like solar and wind.
Aisha Naiga Wamala, Managing Partner at ABMAK Associates, says government’s focus on strengthening the distribution and transmission network is both strategic and necessary.
“Right now, government is investing heavily in upgrading the grid, and that’s a wise decision,” she said. “Generation has grown faster than the supporting infrastructure. When you produce more power than the grid can carry, the system becomes overloaded.”
Wamala adds that ERA’s cautious approach, including the temporary cap on new VRE projects, is essential. This helps to prevent blackouts caused by instability.
“This measure protects consumers. Solar and wind generation fluctuate with the weather. Without a strong grid, that variability can cause interruptions,” she says.
She noted that government spending priorities reflect this reality. A significant share of the budget and new borrowing is devoted to reinforcing the transmission and distribution network.
“Our grid is still not robust enough to handle large volumes of variable renewable energy,” she says. “Also, many distribution lines are outdated.”
According to UETCL simulations, Uganda’s “absorption ceiling” for variable renewables was previously estimated at 250 MW. Now, it has been revised downward to 200 MW.
The revision reflects the engineering reality. Higher VRE penetration without balancing systems or storage increases the risk of voltage and frequency fluctuations.
As of August 2025, Uganda had already committed its available VRE capacity, with 239 MW licensed or permitted.
This includes nine projects (124 MW) operational or near completion, and six projects (115 MW) under feasibility development.
In short, the grid has no remaining capacity for new solar or wind connections until upgrades are made.
What the suspension means
The ERA notice suspends the receipt, processing, and issuance of new licences for grid-connected solar and wind projects.
The freeze does not affect existing licences or off-grid renewable projects, which remain central to Uganda’s rural electrification efforts.
ERA’s policy direction is also shifting. New projects that include hybrid systems, for example, combining solar with hydro or thermal, will receive priority consideration. This also applies to projects that integrate energy storage technologies such as batteries.
I&M Select Banking Sapphire Club wins “Best Innovation of the Year” at UMEAS 2025These systems are viewed as critical for grid flexibility and managing the intermittency of renewables.
At the same time, the regulator is encouraging investment in base-load generation such as large hydro, geothermal, and nuclear power.
The grid stability study
To guide future planning, UETCL, in partnership with ERA, is conducting a comprehensive Grid Stability Study. This will determine how much additional renewable capacity Uganda can safely integrate.
The study will examine the potential of energy storage, hybrid configurations, and smart grid technologies to improve resilience.
Sector sources indicate it will conclude by the first quarter of 2026. This study will form the basis for revised licensing thresholds and eligibility criteria for grid-connected projects.
Investor implications
For developers, the temporary freeze presents both a challenge and an opportunity.
Companies with pending applications may need to redesign their business models. They should include battery storage or hybrid solutions to enhance dispatchability and grid support.
While some investors see the suspension as a setback to the renewable momentum, others interpret it as a prudent “cooling-off period.” This aligns infrastructure growth with system capacity.
Analysts also expect the pause to accelerate the adoption of Battery Energy Storage Systems (BESS) and hybrid project designs. These are already standard in high-renewable markets worldwide.
ERA’s dilemma
In a statement accompanying the notice, Eng Waako reaffirmed the regulator’s commitment to both grid reliability and private-sector participation:
“These interim measures are a proactive step to safeguard the integrity of Uganda’s electricity grid while paving the way for greater renewable energy integration in the future,” she said. “ERA remains committed to a balanced and sustainable energy transition. This supports national development goals and private-sector investment.”
Her remarks reflect ERA’s broader strategy to ensure that Uganda’s energy transition remains technically sound, financially viable, and institutionally stable.
By prioritising grid stability today, ERA aims to secure a foundation for long-term renewable growth.
Balancing targets and realities
The freeze, however, could slow progress toward Uganda’s ambitious 2040 Energy Vision. This target is 52,000 MW of installed capacity, up from 2,046 MW in 2025.
Of the current total, solar contributes 66.5 MW, about 4.4% of the national mix.
The 2023 Energy Policy envisions a diversified portfolio, including 4,500 MW from hydro, 1,500 MW from geothermal, 24,000 MW from nuclear, and 1,000 MW from waste-to-energy.
Achieving that transformation is expected to require investments of about $245 billion (UGX 851 trillion) over the next 15 years.
For now, ERA’s message is clear. Uganda’s energy transition will move forward, but at a pace that keeps the grid stable, the lights on, and investor confidence intact.
