9 July 2012

Uganda: Rural Ugandans Gain From U.S.$5 Million Power Grant

Kampala — More than half a million people in Uganda's rural areas are to benefit from the new US$ 5.5m grant that will increase their access to grid-based electricity services.

"With only 5% Ugandans in rural areas having access to electricity, the country needs to focus its sector reform strategy to those with the least access who are also the poorest people", said Moustapha Ndiaye, World Bank country manager for Uganda during the signing of the Output Based Aid (OBA) grant for rural electrification in Kampala recently. "By extending power access to the poor households, this innovative output-based scheme also compliments the world bank's energy for rural transformation project".

The international development association, acting as administrator of the global partnership on output based aid (GPOBA) has signed the grant agreement with the government. In addition to the grant, the government has allocated $ 4m to co-fund the facility.

The project expected to last for four years will be managed by the rural electrification agency on behalf of government and it will be implemented by the service providers licensed by the electricity regulatory authority and approved to participate in the output-based aid scheme.

OBA is a pro-poor approach which uses explicit targeting to bridge the gap between what low income households can afford to pay and the actual cost of access to basic services such as power, water and health. OBA is used in cases where poor people are being excluded from basic services because they cannot afford to pay the full cost of user fees such as connection fees.

"Ministry of energy and mineral development is implementing small and large hydro-power plants to generate power and grid extensions to improve the transmission and distribution of electricity", said Emmanuel Buringuriza, the coordinator manager, energy for transformation program in the energy ministry.

He said OBA facility will support four types of no pole connections for poor households that can install internal wiring in their home prior to connection and those that cannot afford to install internal wiring at the time of connection.

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