If you argue that the government is not skeptic, cynic and hesitant about investing in renewable energy, look at the words of one Tchouate Pepin of the United Nations Sustainable Energy for All (SE4ALL), a project aiming at promoting clean energy: “It is possible to achieve renewable energy for lighting but not for transport and cooking.”
“In life, it is better to dream than thinking of nothing,” Pepin says. “Renewable energy for lighting is feasible because Uganda is endowed with sufficient resources to enable us do this using hydro- power. But on energy for trans- port and cooking, we can’t.”
Clearly, this is a disheartening statement. But the good news is it is just another opinion. I believe key experts in Uganda’s energy field have such negative opinions too, yet access to just any form of electricity, leave alone renewable energy, has remained a dream to many Ugandans.
Majority households in urban areas leave alone the villages, mainly cook using charcoal and this has posed a huge burden on the country to provide biomass made out of wood. In the rural areas, the situation is much worse. The condemned charcoal is their gold, and the scarce wood fuel a luxury.
The threats of climate change flares high; the government is under pressure from United Nations Framework Convention for Climate Change (UNFCCC), with a handful of aid organisations working closely to offer help they can to mitigate and adapt to global warming.
But government minds seem corrupted by cynicism and their actions tell a different story—that’s if we honestly understand what is meant by renewable/clean energy.
Clean energy includes biofuels, biomass and waste, geothermal, solar, wind and small hydro (up to 50MW) – but not large hydro.
The government herself has maintained its traditional, conservatist course of investments in gigantic hydro power projects. First, not until not so long ago, in 1999 when the Electricity Act was passed,was the monopoly of a statutory corporation, the Uganda Electricity Board downsized.
Today wehave spent over 1 trillion in the financial year 2014/15 in the “first track” of the construction of the 600mw Karuma and 188mw Isimba hydro power plants. Bujagali power dam was also built at the cost of an arm and a leg, all in the mighty name of redeeming the country from darkness.
But beyond these splendors and good intentions, it must be put blatantly that the government is biased on clean energy investment.
Another wicked irony, the most dystopian capitalistic illusion masquerading as oil and gas sector is under gigantic investment…and plans to build geo-thermal and nuclear sources, using uraniumhave remained in the papers too long.
Clearly, steeping up renewable energy sector would lift the country out of years of darkness than these much anticipated much bureaucratic, unclean energy sources.
Can’t we draw lessons from our neighbour Kenya who has achieved relatively high levels of penetration with installed capacity to the grid 5.45mw of clean energy tapped from wind alone? Wind energy is a clean energy source and environmental friendly. Wind turbines don’t produce atmospheric emissions that cause greenhouse gasses responsible for global warming effect, unlike burning of wood fuel that has been customised by most rural households.
The global call to end carbon is loud and clear: cut carbon dioxide emissions and aim towards investing in renewable energy—at all costs—and indeed there are available documents to show the government would be willing to cooperate better if some misgivings are cleared off its throat.
With charcoal demands currently standing at 44 million tonnes per year, yet the forests at the moment can only meet 26 million tonnes of the demand, according to the 2015 Energy Report for Uganda, which was released at the closure of 2015 renewable energy options are no longer optional but a clear way to achieve a safer, carbon free future in order to achieve 1.5 degree global temperature goal.
The Ministry of Finance, Planning and Economic Development, on behalf of government of Uganda, signed a bilateral financial cooperation agreement with the Federal Republic of Germany to facilitate electricity transformation in the East African country.
The cooperation agreement which was signed on Tuesday between State Minister for Finance David Bahati and the Germany Ambassador Peter Glomeyers covers two projects in the Energy sector – the Mbale- Bulambuli Transmission Line and Mbarara- Masala Transmission Line.
The agreement signed will see EURO75m (about $84m) injected into the two projects with EURO 40m spent on the Mbale line while EURO 35m will be spent on Mbarara line. State Minister for Finance David Bahati explained that the effort is in line with government priorities and objectives as laid out in the National Development Plan II (NDP II)
“One of the objectives under the Energy sector is to expand the electricity transmission lines to evacuate power from generation plants; this is what the two projects are set to achieve.” the minister said.
The Ministry of Energy and Mineral Development and UETCL, according to Bahati, will be the implementers of the projects including conducting compensation of people affected by the projects.
Investec Asset Management, through its African private equity capability, has acquired a significant shareholding in Mobisol, a leading and rapidly-growing provider of off-grid solar home systems (SHS) inAfrica.
The deal will see Investec Asset Management partner with Mobisol, existing shareholders and DEG to accelerate the company’s growth in its existing markets and to support its expansion into new markets in
Africa. Already a well-established player in Tanzania and Rwanda, Mobisol is now entering the Kenyan market. DEG - Deutsche Investitions- und Entwicklungsgesellschaft mbh, who has been a shareholder since 2015 and who has been accompanying Mobisol GmbH through different growth phases, further increased their shareholding in the company as part of the transaction.
The Berlin-headquartered company offers low-income African households high-quality solar home systems that are a clean, safe and affordable alternative to fossil fuels. Mobisol systems are designed specifically for the African market and are powerful enough to meet the energy needs of a typical off-grid African household. They are able to power lighting, radios and stereos, mobile phone charging, TVs, and other appliances such as irons, fridges and ventilators.
A three-year payment plan makes the systems affordable, with entry-level systems costing approximately the same on a daily basis as the typical customer spends on kerosene, candles, batteries and mobile phone charging prior to purchasing a Mobisol SHS.
A significant proportion of customers are also able to generate income from their SHS, for example by providing a mobile phone charging service or by running productive electrical equipment in businesses, such as hair clippers in barber shops. The use of innovative mobile technology such as mobile money, allows customer payments and remote system monitoring to be carried out in a cost and time-efficient manner.
“Our partnership with Investec Asset Management marks an important milestone in the growth history of Mobisol. The investment and partnership with Investec will allow Mobisol to concentrate on scaling and better serving our customers while constantly innovating and reinforcing our unique competitive edge.” Said Thomas Gottschalk, Founder and CEO of Mobisol.
Commenting on the deal, Mark Jennings, Investment Principal in Private Equity at Investec Asset Management, said: “We are delighted to partner with Mobisol’s founder-management. Mobisol has established itself as a leading provider of off-grid solar home systems in Africa and we are looking forward to supporting the dynamic team at Mobisol in driving the next phase of the company’s growth and development.”
Since inception Mobisol has installed over 60,000 solar home systems in Tanzania and Rwanda, enabling some 300,000 people to access clean, affordable and reliable solar energy. Mobisol is a major driver of rural development and job creation in East Africa, stimulating economic and social development, particularly for women, while simultaneously contributing to global environmental protection.
With over 600 million people in Africa not connected to the grid, Mobisol’s high-quality off-grid solar systems for households and small businesses are substituting the unavailable or poor grid while offering an attractive and highly scalable solution to addressing the energy needs of Africa.
Investec Asset Management established an African private equity capability in 2008. The Private Equity strategy focuses on growth capital and buyout investments in established mid-market and larger companies in Africa, with the objective of supporting the creation of local or regional champions in their respective industries.
Ministry of Energy and Mineral Development (MEMD) and Toshiba Corporation on August 27, 2016concluded a memorandum of understanding (MOU) that will see the two partners collaborate in geothermal power generation projects, including personnel development.The parties signed the MOU during the Tokyo International Conference on African Development 2016 that was being held in Nairobi, Kenya.
Under the terms of the MOU, Toshiba will collaborate in the development and supply of major equipment for a geothermal power plant, create operation and management guidelines, and cooperate in personnel development. Participation from the development stage positions Toshiba to contribute to the early construction of the plant, and to supply geothermal power generation equipment in the future.
Uganda lies to the west of the Great Rift Valley and has rich geothermal potential, equivalent to 500 megawatts. Currently, about 60% of power generation capacity is from hydroelectric power, and the country has long promoted construction of hydro power plants. Adding geothermal to the mix will contribute to supply stability and the ability to meet rising demand stimulated by high economic growth-currently increasing at about 10% per a year.
“The development of Uganda's geothermal energy resources is in line with our energy policy objectives of increasing power generation capacity and diversifying our energy mix in order to achieve least cost, affordable and stable energy supply”, said Dr. Fred Kabagambe-Kaliisa, Permanent Secretary at the Ministry of Energy and Mineral Development. “We are very confident that the Government of Uganda and Toshiba will create a strong Public-Private-Partnership to develop the Geothermal Energy resources.”
Toyoaki Fujita, Business Development Executive of Toshiba's Energy Systems & Solutions Company said, “We hope to build a strong partnership with Uganda and to contribute to the development of sustainable power supply there. Toshiba’s Energy Systems & Solutions Company is a world leader in geothermal power generation, and I believe that our established expertise can contribute to the geothermal power supply in Uganda.”
Toshiba has delivered 53 geothermal turbines, with a total capacity of 3,400 megawatts, to plants in Japan, the USA, the Philippines, Iceland and other countries around the world. This represents approximately 23%*, of the world's installed geothermal capacity, making Toshiba the world's top supplier. In the African market, Toshiba most recently delivered four geothermal turbines to Kenya that started commercial operation in 2015.
The company has also concluded MOUs with geothermal power development companies in Ethiopia in 2014, Tanzania in 2015 and Djibouti in August this year, all covering comprehensive collaboration in the geothermal power generation business. Toshiba Group will continue to contribute to stable electricity supply and the realization of a low-carbon economy.
The Attorney General has agreed with Sinohydro Corporation’s position, joining the contractor’s dismissal as malicious and totally misconstrued, the allegations in a court case filed against it and others over the procurement process.
The case stems from a suit filed by one Henry Kyarimpa, who asked the High court to order for an independent engineering, financial and value-for-money audit to determine the quality of works and viability of the projects and also to cancel contracts of both the Karuma and the 183MW Isimba hydro power contractors.
However, the East African Court of Justice in Arusha had ruled thus in the same case; “With respect to the order to cancel the MoU between Government of Uganda and Sinohydro, we are persuaded that such an order would be academic and futile. As a court of law, we cannot act in vain and we, accordingly decline to order the respondent to cancel the MoU between the GoU and Sinohydro”
The East African court had further stated that it was impractical to reverse the construction of the Karuma dam by Sinohydro adding that the remedy sought by the appellant was inappropriate in the circumstances.
In their defence to the latest appeal, Sinohydro says the matters Kyarimpa raises in his new petition have already been dealt with by the East African Court of Justice hence they cannot be pursued further by the same parties.
The Attorney General’s defence states that Sinohydro together with the government of Uganda, entered into an engineering procurement and construction contract, which provides, among other things, a consultant whose duties include verifications and ensuring proper works site.
The Attorney General further affirms that if there are any construction issues at Karuma or Isimba, such EPC has in-built provisions for addressing and rectifying such issues, and it cannot be open to the second defendant to arrogate to himself the duty of a consultant to the project.
Government says it has put in place adequate supervision capacity. The AG maintains that the regulations are undertaken by Uganda Electricity Generation Company, which is advised by reputable project management consultants such as SMEC International Limited at Isimba and AF Consulting Switzerland Limited at Karuma.
Furthermore, the Attorney General said contrary to allegations of lack of proper supervision of the project, there is adequate supervision on ground at both Isimba and Karuma hydro power projects to check the quality of work which is currently at 31% and 30% construction progress respectively.
“There are no material and fundamental defects on the projects. The defects so far experienced on site are minor and are those which ordinarily occur in the construction and engineering industry and do not affect the functionality and durability of both projects” AG’s defence reads in part.
The AG also denies Kyarimpa's allegations that there is infighting between the Ministry of energy and Uganda Electricity and Generation Company.
"On the contrary, there is a memorandum of understanding that was entered into by the two institutions spelling out the responsibilities of each institution," the government says, adding: "The first defendant [Attorney General] avers that government of Uganda has not received any credible reports or information of alleged corruption, misuse and wastage of public resources as alleged."
The third International Off-grid Renewable Energy Conference and Exhibition (IOREC) will bring together policy makers, private sector leaders, financiers, and development institutions to push forward the global off-grid agenda at a high level meeting which will sit in Nairobi, Kenya from 30 September to 1 October 2016.
The third International Off-grid Renewable Energy Conference and Exhibition (IOREC), organised by the International Renewable Energy Agency (IRENA) in partnership with the Kenyan Ministry of Energy and Petroleum and the Alliance for Rural Electrification (ARE), aims to improve electricity access by scaling up off-grid renewables.
The Director General of International Renewable Energy Agency (IRENA) Adnan Z Amin believes that achieving 100 per cent electricity access by 2030 will require the pace of electricity expansion to nearly double – but this has never been more possible. The conference in Kenya’s capital will therefore look into how this can be expedited.
“Dramatic cost reductions in recent years have made renewable technologies the most economic option for off-grid electrification – even cheaper than diesel-fired generation or kerosene-based conventional lighting in majority of contexts. Off-grid renewables can spur socio-economic growth while also contributing to multiple Sustainable Development Goals." Amin said in a statement released early this month announcing the conference.
The conference this year will focus on four overarching themes: stand-alone systems for rapid expansion of electricity access; technology innovation to unlock new opportunities; mini-grid development to meet growing demand; and socio-economic benefits of off-grid renewable energy system deployment. Participants will share experiences and best practices on the design and implementation of enabling policies, tailored financing schemes, innovative business models, and technology applications to boost off-grid development.
"A growing number of governments, businesses and individuals are recognising the potential of off-grid renewables as a solution to energy access issues,” said Mr. Amin. “In 2015, USD 276 million was invested in the off-grid solar sector alone, a 15-fold increase over 2012. We now must further accelerate off-grid renewable energy deployment, not just for access, but for economic prosperity and poverty eradication."
Africa Institute for Energy Governance (AFIEGO), a Non-Governmental Origination (NGO) dedicated to influencing energy policies has written to President Yoweri Kaguta Museveni an open letter voicing out their concerns in the energy sector. The paged letter was released Monday, 8 August, 2016.
The letter titled ‘Energy sector development concerns’ is signed off by four other organization which include Africa Institute for Energy Governance (AFIEGO), Guild Presidents Forum on Oil Governance (GPFOG), Green Organization Kyambogo, Oil Residents Association and Grafeni Butimba.
In the letter, AFIEGO proposes seven ‘measure to address the challenges facing the energy sector in order to maximize electricity and oil benefits for the citizens.’ The letter largely tackles governance issues in the development of electricity and oil sectors. We reproduce the letter below as it was shared.
The President of the Republic Of Uganda
Y.E. Yoweri Kaguta Museveni
State House, Entebbe
Subject: Energy sector development concerns
Mr. President, we wish to thank you for the dedicated service you have provided to this country for more than 30 years. Under your leadership, the country has witnessed significant social, economic and political progress. The ongoing development initiatives by the government including the recent approval by the cabinet to issue oil production licenses to oil companies, agreement with Tanzania to build a crude oil export pipeline, discussions with East African leaders to build a joint oil refinery in Hoima district, borrow $71 million to expand electricity access in rural areas, complete the construction of Karuma and Isimba dams by 2020, distribution of $4 million worth of free energy savings bulbs to the poor and many other energy development projects provide further opportunities to achieve our national development goals and vision of attaining a middle income status by 2020.
Mr. President, as you have noted before, electricity and oil developments represent are great chance for the country to develop, but also a big risk depending on the quality of our governance as a nation. Indeed, both the National Development Plan (NDP) II and the National Vision 2040 recognize that the electricity and oil subsectors will have to play a massive role in the transformation of Uganda and most importantly to extricate the majority citizens from the current trap of misery. However, if electricity and oil developments are not managed professionally, with maximum transparency, the same sectors have the potential to cause serious environmental, social, economic and political damage that will impact both the current and future generations. Ugandans must understand the reason why all African oil producing countries have continued to suffer extreme debts amidst plenty. They are suffering because of corruption which some government officials to connive with powerful individuals in government against the citizens.
This is why for the last six years, the government has been spending over 10 per cent of the national budget on electricity developments, yet today, over 86 per cent of the population has no access to electricity and businesses are crossing partly because the little available electricity is too expensive. Regarding the oil sector, we wish to remind you Mr. President that since the discovery of oil in 2006, the government has not performed well on the issues of governance, transparency and accountability. This is the reason why it took the government over 6 years to put in place some of the new oil laws such as the upstream, midstream and downstream of 2013 and 2015 but again, to date, we still don’t have a national local content policy, we don’t have oil regulations for upstream, midstream and downstream and no functioning petroleum authority and national oil company.
On July 3, 2016, the cabinet where you are a chairperson agreed to borrow $71m (approximately Shs 234.3 billion) for expansion of rural electrification (RE) in line with the 2013/2022 Rural Electrification Strategy and Plan. But where is evidence that the previous investments in the sector are helping Ugandans? Instead, even the households that gained access cannot afford the said power and those who try to use it a sign of prestige, end up failing to feed their children or take them to school. Similarly, in the oil sector, to date, oil companies have invested over $3 billion (approximately 10 trillion shillings) but as a country we are still failing to commence production. At the end, we have to pay the companies their costs even when the oil activities are in recession. As a result, Ugandans cannot jobs and the private sector will scamper for bail outs from a government that is heavily indebted.
Regarding corruption, since 1986, you have been promising to stamp out corruption the recent report on National Roads Authority (UNRA) and revealations that both Karuma and Isimba dams have serious technical faults clearly indicate that corruption still remains our biggest national challenge. Again, it is corruption that explains why Own Falls and Kiira dams cannot produce power to capacity or why we lost $220m (approximately Shs726 billion to Tullow against her sale to Total and CNOOC in 2012. It is also corruption that explains why since 2013 when the oil laws were put in place, we have failed to put in place oil regulations and to operationalize the petroleum authority and the national oil company.
Both the electricity and oil sectors in the country are still characterized by political manipulations, secret dealings, Production Sharing Agreements (PSAs) that have bad clauses such as confidentiality clauses, tax exemptions and others. How then do you expect Ugandans to trust your promises of a new Uganda?
For sure, there are many challenges facing electricity and oil sectors in Uganda. They include lack of respect for existing laws by the politicians, weak institutions to implement the laws and supervise the projects efficiently, secrecy in licensing processes, failure to conduct regular audits to assess value for money and others.
Your Excellency, as concerned Ugandans, we would like to ask you to do the following as a measure to address the challenges facing the energy sector in order to maximize electricity and oil benefits for the citizens:
Production licenses: You need to appreciate that the oil sector is very technical and requires high levels of skills. For this matter, the government should operationalize the Petroleum Authority and support it to take responsibility of approving or disapproving the issuance of both exploration and production licenses as well negotiation of PSAs. This will allow the technocrats to do the real job and the politicians can use their powers to supervise the authority.
Value for money audit regarding rural electrification: Before borrowing the $71m from the World bank, first conduct an independent audit to establish whether the citizens have been benefiting from the previous investments. The audit should address the issue regarding the impact of current tariffs on the poor and how best the poor can use the current electricity to improve their lives. It should also provide recommendations such as the use of off-grid electricity such as solar, wind, biogas and others to meet some the energy needs by the poor and isolated communities.
Access to information regarding a refinery and pipeline as Uganda’s oil development options: Government should make public, information regarding the economic logic for Uganda to build both a refinery and a pipeline. What are the advantages and disadvantages of building a pipeline alone and or a refinery only or building both a refinery and a pipeline at the same time? The government should not commence transactions to spend billions of dollars before providing evidence to the citizens to support the social, environmental, economic and political benefits of such projects.
The cost of Karuma and Isimba dams: While we are still stuck with the high costs of Bujagali dam, there is fear that both Karuma and Isimba dams are the most expensive dams in Africa. Today, Ethiopia is building a 6,000wm dam at a cost of $4.8 billion while our Karuma dam of 600mw will cost $1.7 billion. There is for the government to work with the parliament to investigate the cost and quality of the two dams. High costs of dams and corruption in distribution is the reason why 35 million Ugandans cannot consume 850mw during off-peak time. Without transparency, government will struggle to get consumers for Karuma and Isimba power but whether we consume it or not, as tax payers, we shall be compelled to pay the returns on investments that are always guaranteed by our government. Indeed, building a dam is important but ensuring that the cost is competitive both nationally and internationally-(a factor that is always ignored by our government), is the most important. Even the East African and African power pools will help us if our power is too expensive. So, we need to investigate and close the gaps.
Power as a big factor of production: Government must appreciate that the current crisis facing the business community who are asking for bail out are symptoms of deeper problems ranging from high costs of production. Companies like Uchum closed but as a country, we did not care investigate why they closed. Now, our own are closing and we think the solution is bail out. Bailing out is good but if its done before addressing the defects in production factors such as the cost of electricity, it will not help.
Mortgaging oil: We are concerned that since the discovery of oil in 2006, the borrowing by the government has continued to increase steadily and it is clear that other than oil, we don’t have any other source to generate money to pay back the billions of dollars being accumulated in debts. So, it is logical to conclude that the government is borrowing against the oil that is still underground, and this is a big mistake. These are the mistakes that explain why majority African oil producing countries the biggest indebted governments in the world. Let’s not take Uganda to that direction.
Off-grid electricity solutions: The government, instead of spending billions of money to extend grid power to isolated and rural poor communities, it should invest in solar, wind, biogas and other renewable technologies to provide clean energy to households where they will not be required to pay monthly bills. After all, the available evidence indicate that that even those who have grid power, they use less than 15 Kwh units per month and these can be supplied by off-grid technologies. In effect, grid power should ring fenced for industrial parks and areas where a lot of electricity is needed for manufacturing. But for off-grid to reach every corner and household in Uganda, our government must take a deliberate step to invest in the subsector and not leave it completely to private companies. It is also necessary that those managing the off grid and grid power projects connect to avoid wastes.
Your Excellency, we hope, you will put our proposals into considerations for the benefits of the citizens.
The Ministry of Finance, Planning and Economic Development has been given the green light to acquire a $71m loan from the World Bank to finance the grid expansion under the Rural Electrification Strategy Project (RESP) for 2013-2022.
A Cabinet meeting that sat on Wednesday 3rd August 2016, at parliament building approved the a loan request from the ministry of finance. The money will also reinforce the project which is in pursuit of the objectives of the Rural Electrification Strategy Project which provides for the Road map to increase power access to 26% by 2022.
According to a statement released after the meeting, the loan will finance a series of investments in power distribution and off-grid solutions required to achieve the rural electrification 2013-2022 strategy. Some of the beneficiary districts include Gulu, Lira, Nebbi, ARUA, Kole, Oyam and Nwoya.
The World Bank board of executive directors last week approved a financial package of USD 200 million for the Tanzania Rural Electrification Expansion Programme from the International Development Association (IDA). The loan will boost rural electricity connectivity.
The new financing is a big boost to the project that is expected to connect up to 2.5 million households in rural areas to the national electricity grid over the next five years, according to a statement from the WB headquarters in Washington.
“The programme aims to build on the recent achievements of expanding nationwide access to 36 per cent in 2014. In addition, the Programme will scale up the supply of renewable energy in rural areas while strengthening sector institutional capacity,” said Bella Bird, WB country director for Tanzania, who also covers Malawi, Burundi and Somalia.
“Access to electricity is critical to extend economic opportunities and reduce poverty...this programme not only offers the opportunity for many more Tanzanians to have access to power in their homes and businesses, but also enables small power producers to access finance to invest in production, including renewable energy sources.”
The government of Tanzania is currently implementing a national energy policy whose goal is to increase the country’s overall electricity connectivity to 50 per cent by 2025 and to at least 75 per cent by 2033.
The National Rural Electrification Programme (2013–2022) under which the new programme is to be implemented, includes both on-grid and off-grid solutions and has four priorities: the connection of new customers to the grid in already electrified settlements; new connections to the grid; electrification through off-grid investments; and the development of distributed technologies, in particular off-grid solar and other renewable technologies.
In addition to household beneficiaries, Institution’s financing will also, in part, benefit 25,000 education facilities, 25,000 health facilities, 150,000 businesses. And Small Power Projects would also benefit from access to capital to enable them to contribute 33MW in renewable energy under the programme.
The Electricity Regulatory Authority (ERA) will hold a consultative meeting at Musasa Church of Uganda in Musasa Village, Kyondo Sub-County in Kasese District to discuss the pending application for a License by Nyamagasani II HPP Ltd to construct, generate and sell electricity from the proposed 6 MW hydropower plant across River Nyamagasani in Kasese District.
According to a public notice issued by the regulatory body, government agencies, electricity sector stakeholders and persons affected by the application are invited to attend the hearing to be held on the 28th day of July 2016.
“All stakeholders and affected persons wishing to make a presentation and or comments before the Public Hearing may register and or submit their respective comments to the Secretary to the Authority at the address above not later than the 26th day of July 2016.” The notice reads in conclusion.
Kasese district is home to a couple of small hydro power project including finished Bugoye Power Station, Mubuku I Power Station, Mubuku III Power Station, all on River Kibuku and Nyamwamba Power Station on river Nyamwamba.