21 October 2012

Uganda: Delays Frustrate Power Sector Donors

Regional power pool project was agreed six years ago but is yet to take off for various reasons:

Six years ago, development partners pledged $400 million (about Shs 1trillion) to the governments of Uganda, Kenya, Rwanda, Burundi, and the Democratic Republic of Congo to implement a regional electricity interconnection project to help member states share electricity efficiently, reliably and affordably.

However, the donors are now running out of patience because the project is unnecessarily being delayed by various factors including failure to complete power purchase agreements, differences in languages, a tedious tendering process for the construction of the power lines among others.

The project, which entails the construction and upgrading of transmission power lines to interconnect the five Nile Equatorial Lake countries, is to be funded by the African Development Bank, the Japanese International Cooperation Agency (JICA), and the Germany Government funding agency KfW.

At a stakeholders' workshop in Kampala on Oct.11, representatives of the donors expressed concern saying the beneficiary countries were still "just talking about the project" instead of actually starting work to implement it.

However, Simon D' Ujanga, Uganda's junior minister for energy, said while Uganda was on track with the project, he had advised the other countries to work at ensuring that the countries can share electricity by 2015.

D' Ujanga, who presided over the opening of the workshop, said Uganda had completed the tendering process and was ready to start construction of the power line from Kawanda--Masaka-Mirama hills and then connect to Rwanda by 2013. However, he did not disclose the company that won the tender.

The DR Congo and Burundi are said to be lagging behind and as they are yet to complete the tendering process. "If the project is to succeed we need to all move together," D' Ujanga said, adding each country would construct its power line to connect with the other. As a way forward, representatives of the five countries agreed to move "quickly" by building trust and stop "just talking."

Future Supply & Surplus of power by country (MW) for selected countries

Country Existing-2012 Future-2013/2030 Total-2030 Demand-2030 Surplus-2030

Burundi 49 422 470 385 86

East DRC 74 1117 1191 179 1012

Ethiopia 2179 13617 15796 8464 7332

Kenya 1916 7188 8805 7795 1010

Rwanda 103 411 514 484 30

Sudan 3951 11310 15261 11054 4207

Tanzania 1205 4881 6086 3770 2316

Uganda 822 2531 3353 1898 1455

Total 36436 87334 123769 104136 20099

Source: East African Power Master Plan Study, May 2011

Other benefits:

The 'power pool project' is expected to strengthen the interconnection between the member countries and allow them to exchange power within the sub-region. Apart from the socio-economic benefits, there are also technical benefits and above all enhancement of regional peace and security. These include the increase in system availability and reliability as well as the increase of dynamic stability of the system. Essentially, the project would enable members to optimise the use of energy resources and tap the benefits of the hydro/renewable energy mix.

By enabling bulk transfers of power from cheaper sources to load centres in the region, the system would enable countries to commit resources to other development projects and delay the construction of new power plants. The project is being replicated from Europe where similar projects have been implemented with tangible results.

The transmission infrastructure that will be put in place by this project will help to evacuate power from Uganda's hydropower projects (Karuma and Bujagali) and other renewable energy projects to the southern and western parts of the country enroute to Rwanda and DR Congo.

But most importantly, the regional project will be boosted by the varied energy mix that can improve the diversity of power supply in the region. For instance Uganda is rich in hydropower, Rwanda has substantial methane gas in Lake Kivu that can be developed to feed in the East African network, Kenya has geothermal energy resources that can also be developed for feeding into the network. Kenya's proximity to the sea - hence able to receive cheap oil supplies - can also assist in supplying thermal power in emergency situations such as drought.

Eva Paul, from the KfW-German Financial Cooperation, said they chose to fund the project in order to assist countries access cheap and affordable power, improve the living standards of the people in the region and foster cooperation and mutual understanding among the countries in the region.

According to the AfDB, with regional integration process, availability and efficient power was necessary. But it said countries have to be transparent, accountable and faster in the process of power interconnection. Participants were of the view that countries have the potential in this sector and should look forward to implementing it since future forecasts indicate high power demand-meaning a lot has to be generated.

According to the East Africa Power Report Q2 2012, which is compiled by Business Monitor International, within five years from 2011 to 2016, Uganda's overall power generation is expected to increase by an annual average of 9.02%, to reach 4.28TWh by 2016. Uganda's net power consumption would increase from 2.16TWh in 2011 to 3.30TWh by 2016, rising further to 4.90TWh by 2021, underpinned by a steady rise in GDP, as well as sustained population growth.

But it warns that in the short-term, Uganda's dependence on hydroelectricity for the bulk of its power generation means that the country remains extremely vulnerable to fluctuations in rainfall as this which would dry up the rivers and lower lake water levels.

Going forward, Uganda, like regional counterpart Kenya, must introduce a more diversified energy-generation capability. While additional hydro facilities are being developed in order to reduce dependence on costly diesel-powered generators. Under its Renewable Energy Policy, the government aims to increase the use of renewable energy to 61% of total energy consumption by the year 2017, an ambition that appears to be a little far-fetched.

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