Uganda has low national electricity access at 15%, only 7% in rural areas. Biomass contributes 88% of energy, mostly inefficiently used for cooking. The government reformed the energy sector and provides enabling environment for private investment in generation and distribution. Key priorities include increasing generation and access, developing renewables, and efficient utilization. Challenges of off-grid include high upfront costs, limited capacity and awareness. Initiatives provide subsidies, tax exemptions and financing to address challenges and incentivize off-grid development. Consolidating off-grid projects and addressing financing, licensing and connectivity issues are required to realize off-grid potential.

1. By
Delegation From Uganda – (Benon Bena, Evarest
Ssemujju, Hatimu Muyanja )
Ministry of Energy and Mineral Development
REPUBLIC OF UGANDA
Ministry of Energy and Mineral Development

2. Lay out
1. The current status of off-grid energy,
2. Remaining challenges,
3. Key initiatives, and
4. Further actions required
5. Conclusion

3. The current status of off-grid
energy
 Uganda has an installed capacity of approximately 850
MW, mostly consisting of hydropower (692 MW;
84%).
 Access to electricity in 2013 at national level in Uganda
is very low with 15% (1991: 5.6%; 2006: 9%; 2010: 10%)
but only 7% in rural areas
 The majority of the primary energy which is over 88%
of the energy balance comes from biomass most of it
used for cooking using inefficient technologies.

4. Current status
Uganda’s Energy Balance
 Source: MEMD, Statistical Abstract,
Source of Energy Contribution %
Biomass Fuel wood 78.6
Charcoal 5.6
Residues 4.7
Petroleum products 9.7
Electricity 1.4
Total 100

5. Energy sector structure
 Uganda reformed its energy sector from monopoly Uganda
Electricity Board leading to liberalise the sector.
 The Government provides an enabling environment for
private sector investments in generation and distribution
of electricity while transmission above 33kV remains a
public function through the Uganda Electricity
Transmission Company Limited (UETCL).
 The Electricity Regulatory Authority (ERA) was
established to license and regulate operations of all
electricity operators,
 The Rural Electrification Agency (REA) was put in place to
ensure that rural electrification is accelerated

6. Energy policy framework
Key Priorities
a. Increase electricity generation capacity and
transmission network.
b. Increase access to modern energy services
through rural electrification.
c. Develop renewable energy.
d. Promotion of efficient utilization of energy.

7. Some of the off-grid projects implemented
ICS
 Gasification system
Solar systems
Biogas

8. 64 KW Community Micro Hydro
Power Systems – Bwindi

9. 25 KW solar PV systems with Battery bank used at base load at Seroma
Christian High school Mukono

11. Challenges of off grids
 Most of the off grids which are renewable
energy technologies have much higher
upfront investment costs compared to other
conventional energy options.
 Legal and institutional frameworks to
support off grids is still limited (length
licensing process)
 There is limited technical and institutional
capacity in the public and private sectors to
implement and manage off grid
investments.

12. Challenges of RE conted
 Financing mechanisms to support investments
in off grid energy project and to address the
affordability of consumers, are either
inappropriate or inadequate.
 There is limited awareness of the availability,
benefits and opportunities within the public.
 Biomass energy resources are utilized
inefficiently and, therefore, unsustainably.
 There are inadequate standards and quality
assurance.
 There is insufficient information and data on
off grid energy resources availability and
technologies.

13. Key incentives for off-grid
 Capital subsidies from REA covering the cost of
the local distribution grid in order to buy down the
end-user tariff
 Tax exemption of renewable energy generation
equipment.
 License exemption for off-grid projects with a capacity
not exceeding 2MW.
 Exemption from complying with all service standards
applicable to the main grid
 Light handed environmental regulation for small
renewables energy projects

14. Incentives cont…
 There are a number of financial instruments available
for developers of mini-grids in Uganda
 The liquidity insurance facility from Uganda Energy
Credit Capitalization Company Ltd (UECCC) to enable
Participating Financial Institutions (PFIs) extend the
tenure of the loans.
 Partial Risk Guarantee facility from UECCC available
during the construction phase to cover for cost overruns
of up to 15% of the total project cost. Any addition cost
overrun up to 50% is finance 50:50 by both parties.
 Bridge Financing Facility from UECCC to cover interest
payments during the construction stage of a project,
before it starts generating cash flows but payable after
commissioning.
 Transaction Advisory Services from UECCC

15. Conclusion
 Due to the scattered nature of settlements in Uganda, mini-
grids will play a major role in increasing electricity access in
Uganda. Many people are migrating into trading centres
which is providing opportunities for decentralized mini-
grids.
 However, the potential will not be realized unless constraints
are addressed:
 The mindset of energy planners who view grid as the only
approach to providing electricity.
 Demonstrate that mini-grid can provide reliable electricity cost
effectively.
 Consolidate projects in a geographical area to benefit from
economics of scale and reduce operational cost.
 License projects covering the whole geographical area

16. Conclusion cont…
 Address the high upfront capital requirement, the resultant
high end-user tariff and the ability of the rural communities
to pay.
 Provide subsidies and concessional financing to lower the end-user
tariff.
 Streamline and shorten the licensing regimes
 Remove or reduce license fee for very small renewables.
 Provide predictability of when the grid is likely to be
extended to the area.
 Develop rural electrification master plans that give timelines of
when the grid is expected.
 Improve regulation & incentives for connection of small
renewables to the grid
 Currently Uganda has a single buyer model. A need to allow
embedded generation

17. Thank you for listening