Irene Batebe, the Permanent Secretary in the Ministry of Energy and Mineral Development
The Ministry of Energy and Mineral Development has highlighted the reduction in the cost of power as one the key achievements in the 2021-2026 NRM Manifesto implementation. The Ministry says it has achieved over 80% of its commitments for the period 2021-2026.
To date, a tariff of US5 cents per kWh has been achieved for all extra large consumers of electricity (those consuming above 1.5 MW) at off-peak.
The revelation was made by Irene Batebe, the Permanent Secretary in the Ministry of Energy and Mineral Development, while presenting her ministry’s achievements in the implementation of the 2021-2026 NRM manifesto at the Office of the President Auditorium in Kampala on Tuesday.
“A tariff of US5 cents per kWh for industrial parks that are willing to increase production capacity to maintain their monthly billing invoice without affecting the financial sustainability of the electricity supply industry was implemented effective January 2023,” said Batebe.
According to Batebe, with the amendment of the Electricity Act in 2022, manufacturers who qualify are now able to purchase electricity directly from the power generators. So far, Nile Breweries is purchasing power from Munyenye Solar Company Limited while Zhurong Technologies Limited is purchasing from UETCL/UEGCL. “Other consumer categories are benefiting from other initiatives such as the cooking tariff,” added Batebe.
Recently, the government reduced the cost of cooking using electricity down (to Shs 402) per kWh charged after consuming the first 80 units and before the 150th unit. Batebe says that “a reduction/declining block tariff was introduced so the more units one consumes the less the unit cost of tariff.”
The government has also introduced a hybrid connections scheme to ease connections for households that cannot meet the full connection cost.
Under this arrangement, instead of the consumer paying total of Shs 720, 883 for a connection, a customer pays Shs 200, 000 and is immediately connected. This means that the government offers a grant of Shs 250, 883 and the customer gets an interest free loan of Shs 270, 000 deductible from the tariff over an 8-year period.
This came as power generation capacity increased from 984MW in 2017/18 to 3,500MW in 2024/25. This followed the commissioning of Karuma Hydro Power Plant. The installed capacity is expected to further increase at the end of the 2024/25 financial year once Nyagak III Hydro Power Plant and other small hydro plants currently under construction are completed. Nyagak current stands at 98% completion.
The government has also increased high voltage transmission capacity from 2,354km in 2019/20 to 4,354 in 2024/2025. According to Batebe, the total length is currently at 4,354km from 2,354km in 2019/2020.
The government has also committed to increase the number of households with access to modern energy services to 60% by 2024/25 from 24% in 2018/19. Indeed, access to energy increased to 60%. Of this, 22% are connected to the national grid and 38% off the grid. The government also added about 15,000km to the distribution network bringing the total to 65,992km. As of the end of June 2024, the number of grid connected consumers was 2,189,522. This is expected to increase by 1.3 million by 2030 with the government’s resumption of the electricity connections policy and the commencement of the energy access scale up project.
The Ministry says Government is now focusing on reducing share of charcoal and firewood (biomass energy) used for cooking from 85% to 50%. The current biomass use is still estimated at about 80% for cooking. However, Batebe says that 9, 491 biogas systems have been constructed making the cumulative household biomass systems at about 10, 000 plants. 10, 000 LPG cylinders were distributed in Greater Kampala Metropolitan Area. The government is also focusing on promotion of renewable energy systems. Under this arrangement, the government installed, tested and interconnected to the grid the 4MW solar project at Busitema University.
Minerals
The government had committed to increase efficiency in extraction of oil and gas. As of June 2024, national participation in the petroleum industry were 47, 682 (13, 389 direct and an estimated 34, 293 indirect) Ugandans employed in the oil and gas and related industries. Over 14, 000 Ugandans have been trained and certified in various oil and gas disciplines of welding, health safety and environment, heavy goods vehicle, and scaffolding among others, while approximately 73% of the companies involved in supplying the sector have been Ugandan companies. (460/624).
The government also pledged investment in mining and value addition. Under this, the Ministry says over 10 gold refineries have sprung up to refine raw gold into pure gold at 99.99% in alignment with the government commitment to attract investment and promote exports to support industrialization, economic diversification and structural transformation. The government also established a modern mineral analysis laboratory and mineral beneficiation centres.
Challenges
Batebe says that all these achievements have not come without challenges.
For instance, Batebe says that land acquisition for government for energy and petroleum projects takes a long time and a considerable budget due to several complexities experienced in the process. There are also cases of vandalism on the transmission lines and other installations.
But she says that the government is developing bankable projects that can either attract private sector investment or concessional financing. Emphasis is also being put on the outputs that facilitate attainment of the first oil production, with focus on local content development.
