Experts in the renewable energy sub-sector have called for free progress towards a clean energy society instead of forcing the transition.
They advise that the energy sector specifically renewable energy is organic and that Uganda, as a renewable energy market will keep growing as demand and ability of the suppliers grow.
They were speaking at a capacity building dialogue in Kampala at which at least 12 SMEs in Uganda’s solar and cooking sectors were capacitated by Belli Advisory through the 2nd phase of a Business Development Support training program.
The program is aimed at streamlining processes and growing the businesses of the service providers in the subsector.
Renewable energy has been one of those solutions that the government is focusing on to tame the low access to cleaner and formal energy sources, in a country where charcoal and firewood dominate cooking.
This is because the available alternative solutions are still considered too expensive for an ordinary Ugandan.
Frank Neil Yiga, the Chief Executive Officer at Anuel Energy says Uganda has organically evolved over time, with solar being a preserve of big organizations a few years ago, to now being used even by market vendors, which shows that the country will evolve steadily to a green energy society.
Yiga’s view was also supported by Amanda Kambagambe, Managing Director at Bethel Advisors, a business development advisory organization in Uganda.
While the country’s population is sometimes limited by resources to enable the transition, there is still limited awareness of the available affordable solutions but also limited knowledge of the benefits of using clean energy.
Kambagambe said the transition will be inevitable and that the market is growing, calling for investors and solution providers to know what is right and convenient for the market.
The initiative by Belli Advisory supported by GIZ Energising Development (EnDev) Uganda, is expected to enable beneficiary companies to receive training and mentorship in the areas of Strategic Planning, Investment Readiness, Marketing, Operations, Human resource management, and Financial management.
The “Renewable Energy Business Accelerator Dialogue,” was meant to address critical issues surrounding SMEs in the renewable energy industry.
The organizers say that there are over 2.5 million Ugandans employed in the sector, accounting for 90 percent of private sector development, their pivotal role cannot be overstated.
The service sector alone, which includes energy SMEs, makes up 49 percent of the total SMEs in Uganda, contributing at least 44 percent to the nation’s GDP.
However, despite their substantial contributions, renewable energy SMEs face various performance-related challenges, primarily stemming from ineffective business governance and limited access to finance.
“Even as we are talking about energy efficient stoves, we are ultimately driving at eliminating the usage of firewood and charcoal altogether, and that is why we want to support these SMEs which are producing energy-efficient technologies, to open up their markets and make their products affordable,” said Jacob Etunganan, an Energy Efficiency Expert at Dutch development organization, SNV.
The World Bank’s 2020 report revealed that SMEs struggle to secure mainstream financing from traditional banks due to factors such as a lack of collateral and inadequate record keeping.
Even SMEs with the requisite documentation still face difficulties in raising capital, with micro SMEs often considered high-risk and receiving less priority.
The Renewable Energy Business Accelerator Dialogue aimed to address these pressing issues by emphasizing the role of business development support services in preparing renewable energy SMEs to attract investors.
On the proposal of mergers and collaboration as an alternative source of financing, Matthias Möbius, a co-founder of StartHub Africa, cautioned that mergers have to be well thought-out and all parties prepared if the initiative is to succeed.
He says collaboration and mergers must be based on an expectation of a win-win situation.
The dialogue delved into the challenges faced by businesses in accessing financing, the apprehensions of financiers, and the potential of Business Development Services (BDS) in bridging these gaps.
Belli Advisory, the organization behind this transformative dialogue, believes that growth, innovation, and sustainable development are the way forward for the SME landscape in Uganda.
The dialogue delved into the challenges faced by businesses in accessing financing, the apprehensions of financiers, and the potential of BDS in bridging these gaps.
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