The Observer (Kampala)

Uganda: U.S. $1 Billion Rural Power Plan - Let's Avoid the Nakaseke Example

The agency last week unveiled a $1bn plan to take power to the rural areas. The grand plan seeks to have at least 26 per cent of Ugandans access power by 2022.

This is an ambitious plan if you consider that despite the last 27 years of the National Resistance Movement - and its now tired mantra of fundamental change - has seen just 14 per cent of Ugandans access electricity.

And, by the way, this figure gets smaller because the industries consume much more power.

The picture gets further darker if you also consider that the few who have access to power do not enjoy it throughout the day; scheduled power cuts, administered by the distributor Umeme, are something that many Ugandans are gradually learning to painfully live with.

Sectors like tourism continue to suffer because of lack of power. In Kalangala, for example, power goes off at midnight, leaving tourists with the option of either retiring to bed early or lighting up a bonfire.

That is why any plan by REA to boost power supply throughout the countryside is welcome. But first, there are a couple of issues to think about: extending power to rural areas is not as easy as putting up a supermarket.

There are a number of things to consider: the government needs to figure out whether the area needs the power, and can afford it. It also needs to calculate whether extending power to a rural area will attract industries to invest or even open up new markets.

There is no better example to prove this point like the area of Nakaseke. About three or four years ago, government decided to take power to Nakaseke. By all accounts, Nakaseke is a rural area, with no solid industry to its name.

Nakaseke, however, had one asset: Syda Bbumba, a shrewd political mobiliser for the ruling party, who was once the minister of Energy, and later minister of Finance. For some odd reason, while other areas with better business prospects were languishing in the dark, Nakaseke, with all its rustic countryside, managed to get electricity.

Power lines were connected over mud-and-wattle houses, which belonged to people who could not even afford to buy a loaf of bread. So, why was power connected to an area that could not afford it, leave alone needed it?

Some say it was all down to politics, especially with the 2011 general elections fast approaching. Others say this was a symptom of some of what has gone wrong in the energy sector. REA cannot afford to have another Nakaseke. There is a need for smart and strategic decisions when it comes to undertaking rural electrification.

The failure to balance this will only leave government and investors on a collision course. For example, this year alone, a number of companies have written to the Electricity Regulatory Authority (ERA) asking for an increment in the power tariff.

From Kakira Sugar Works Limited in eastern Uganda to Kilembe in western Uganda, right up to WENRECo in West Nile, almost all power firms want a power tariff increase in order to survive. ERA has turned down some requests such as Kakira's.

And in West Nile, the locals were so disturbed by the proposal by WENRECo to increase power tariffs that a number of them suggested the company should take the power to other areas where it was needed instead of piling the burden on one region.

Consumers, obviously, are against any increment. But someone has to pay for this power. Energy companies are not willing to put up power plants unless somebody is going to afford it. That is the question that government needs to think about critically.

It's not just about taking electricity to rural areas; there is a need to improve entrepreneurial skills so that the people in the villages can open new business and take advantage of the electricity. There is also a need to support local industries like the commercialisation of agriculture.

Then, lastly, government will have to vet the companies that will carry out this rural electrification. Many companies, with the help of political lobbyists, have won licences to put up energy plants in rural areas.

However, instead of starting work, these firms have simply turned into speculators, waiting to sell off their licences for a hefty price. Electricity authorities have to watch out for such companies.

Finding the formula for rural electrification is not that hard. It is finding the balance between the different interests. And that is where government's work is cut out.

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