The rural electrification drive has received a much needed boost of Euro's 13.1m (sh46.4b) from the Dutch ORIO Infrastructure Fund for feasibility studies leading to the construction of 10 mini hydro power stations around the country.
The support will bolster efforts to increase access to electricity in the rural areas from 1% to over 10% through the use of renewable energy solutions such as small hydro's, solar and biogas.
Energy minister Irene Muloni is set to launch the project, commencing with an 18 month feasibility study of sites around the country costing euros 900,000 (about sh3.2b), followed by a euros 24.4m (sh86.4b) construction phase.
The mini hydro sites will be concessioned to the private sector after construction.
Roy Nyamutale Baguma, the transaction execution manager at the Uganda Energy Credit Capitalisation Company (UECCC), said the money shall be used to fund mini hydro power stations of up to 1.5Mw each.
Currently, power demand is estimated at 445Mw and growing rapidly each year. The country requires an additional 50Mw each year to avoid electricity black outs due to load shedding. "The studies will commence in February 2013 for a period of 18 months and will be undertaken by Royal Haskoning, an international engineering and consulting company," Nyamutale said.
He pointed out that after the development phase, ORIO will have to reconfirm its matching support of 50% to the implementation/ construction phase of the 10 mini hydros. "Total costs of the construction phase are estimated at euros 24.4m," he said.
He explained that upon completion, up to 347,000 households will be connected to the grid, allowing rural populations to read and write at lower costs. About 800 small and medium size enterprises will be connected. The project will contribute towards the climate change mitigation through reduced pressure on the use of firewood and reduced release of carbondioxide.
The addition of over 10Mw from this project will supplement on-going efforts to produce some 71.8Mw from Kakira (12Mw), Kikagati (10Mw), Bugoye (13Mw), Mpanga (18Mw), Ishasha (6Mw), Buseruka (9Mw), Nyagak (3.5Mw) and Kisiizi (0.3Mw).