10 March 2017

Uganda: Investment Opportunities in the Uganda Energy Sector

Photo: Joy Asico/EnergyNet
rene Muloni, Minister of Energy And Mineral Development, Uganda
document

Washington, DC — Distinguished participants. Ladies and gentlemen.

1.    It is my pleasure and honor to participate at this high level keynote address as part of the 3rd Annual Powering Africa Summit 2017. I will use this opportunity to highlight the efforts made by my country and the region; and the investment and business Opportunities in the  energy sector.

2.    Allow me thank the organizers of this Summit that is showcasing power, trade and infrastructure opportunities across the African continent, engaging principal decision makers from the American and African public and private sectors to explore how project bankability can be increased.

3.    Africa’s economies have registered remarkable growth and expansion in the past decade. Consequently, the continent’s energy needs have also grown and continue to grow substantially. However, lack of access to adequate and sustainable energy services remains one of the major constraints to economic development on the continent. Solid biomass is still a dominant source of energy in many countries, supplying up to more than 80% of their energy mix. Only about 32% of the population of Sub-Saharan Africa has access to electricity, with only 15% having access in rural areas. The per capita energy consumption for Africa is the lowest in the world. With limited generation capacity, low energy efficiency and nascent governance institutions in the energy sector, energy security is now widely recognized as a critical concern that must be addressed immediately across the continent.

4.    This summit is very important for us because energy is a prerequisite for the social economic transformation of our countries. There is urgent need to address the challenges which include:
Challenges Facing the Energy Sector
5.     Low Energy Consumption: While Africa is well endowed with a lot of energy resources, Energy in Africa is a scarce commodity than in the developed world. Africa has a very low per capita energy consumption of less than 600kWh.

6.    Low level of Access to modern forms of Energy: Africa has the lowest access to modern energy services.  For instance in East Africa, the level of energy access is hardly 10% with the majority of the population using traditional forms of energy.

7.    Inefficient Utilization of Energy: In most African countries, efficiency of energy use is still very low. There is far less attention paid to efficient use of energy than to efficient energy supply, yet demand-side management not only benefits consumers in reducing their bills, but also makes the same supply available to more consumers, which is particularly important in supply constrained African economies.

8.    Low Generation Capacity to meet the growing demand. To meet the demand a number of countries have been forced to acquire thermal power plants which have made the tariff high. There is need to provide additional generation capacity at competitive prices to meet the growing energy demand.

9.    Inadequate Transmission and Distribution Infrastructure to support Regional Trade: The existing infrastructure cannot allow inter-regional energy trade to enhance security of power supply in the region.

Harnessing the Natural Resources

10.    On the other hand, Africa is blessed with a variety of energy resources, including biomass, hydropower, solar, wind, geothermal resources and petroleum.

11.    The challenges facing our countries therefore provide a good business opportunity because energy is a perquisite to development. The Sustainable Development Goal No.7 requires ensuring access to affordable, reliable, sustainable and modern energy for all.

12.    Realizing universal access to energy will involve investing in clean energy resources such as hydro, solar, wind, geothermal and all forms of renewable energy.

The Case for Uganda

13.    In Uganda we have prioritized energy as a key area for development. The major priorities in the Energy Sector are to:
i    Increase generation capacity;
ii    Expand the transmission and distribution networks for local and regional integration;
iii    Increase access to modern energy services through rural electrification and renewable energy development;
iv    Promote energy efficiency;
v    Guarantee energy security;
vi    Promote industrialization through energy affordability.

14.    We have put in place the necessary reforms with good policies, legal, regulatory and institutional frameworks which have already attracted foreign direct investment and allowed private sector participation. Over 70% of our electricity is generated with private sector involvement.

15.    We welcome more partnership between African and American entrepreneurs in meeting the growing energy needs of our countries.
Regional Cooperation
16.    With regard to regional cooperation , the East African community is spearheading the power sub sector projects that are looking at projects focusing on:

i.    Regional Interconnection through high voltage transmission lines in order to facilitate a vibrant regional power trade i.e The Eastern Africa Power Pool (Uganda, Kenya, Tanzania, Rwanda, Burundi, Democratic Republic of Congo, Ethiopia, South Sudan, Sudan, Egypt);
ii.    Cross border Electrification to increase access in a cost effective manner. This involves implementation of cross boarder projects that enables communities at the boarder getting access to electricity from the nearest grid which may be from another country;
iii.    Energy efficiency through promotion of centers of excellence, Research, Development and innovation.

17.    These regional projects are very important in enhancing energy access and security.
Business and Investment Opportunities

18.    To increase access to modern forms of energy, considerable financial and human resources will be needed. These will include resources both from the public and the private sector.

19.    The major opportunities for the private sector includes the following:
•    Participation in developing renewable energy projects (hydro, solar, geothermal, biomass, wind) to meet the growing demand of power;
•    Financing of renewable energy projects;
•    Consultancy work on studies and designs;
•    Engineering, Procurement, and Construction (EPC) of the planned generation, transmission and distribution projects.
•    Supply of equipment as we upgrade and expand the transmission network.
•    Development and promotion of the different renewable energy technologies such as small hydros,  geothermal, solar mini grids, solar lighting, solar water heating, solar water pumping, wind and biomass.
•    Mini-grid electrification to meet the electricity needs of populations away from the main grid.

Conclusion

20.    In conclusion,  the vast renewable energy resources Africa is endowed with are more than enough to meet the continent’s growing demand for sustainable energy. Research, science, technology deployment of appropriate technologies and investment is all that is required to progress the continents efforts to sustainable energy for economic development. We therefore need to scale up our efforts in a systematic and coordinated approach in addressing these critical areas in order to move the continent forward.

21.    Uganda has put in place a conducive investment climate and welcomes the business community to invest in the energy sector.

I thank you for your kind attention

The Hon. Irene Muloni, Minister of Energy And Mineral Development, Uganda, delivered this keynote to the Powering Africa Summit

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