The Board of Directors of the African Development Bank (AfDB) approved a project preparation grant of USD 2.3 million to kick-start future investments in decentralized power systems in rural and urban areas in Uganda. The grant was provided by the Scaling-Up Renewable Energy Programme of the Climate Investment Funds managed by the AfDB's Department of Climate Change and Green Growth.
In particular, the grant will cover the expenses associated with the development of an off-grid master plan for the electrification of a number of islands across Lake Victoria, including feasibility studies for the most viable ones and set the path for future energy investments in the selected islands.
"Rural electrification rate in sub-Saharan Africa is the lowest in the world, at less than 20%. The electrification of rural areas carries inherent difficulties. Issues such as high costs of capital, low revenue collection rates, and insufficient generation capacity among others, are good examples of difficulties that are severely augmented when the area targeted for electrification is remote and unique in nature" said Amadou Hott, AfDB's Vice President for Power, Energy, Climate Change and Green Growth. "The proposed electrification program on the islands in Lake Victoria will considerably boost economic and social development and improve the lives of the most vulnerable ones especially the women and youth", Hott added.
The grant will develop the required regulatory and legal frameworks with the objective of piloting solar net-metering systems before the technology can be scaled-up and rolled-out to private businesses and households. Net-metered solar photovoltaic (PV) systems provide a win-win situation. "On the one hand these systems provide consumers with the ability of self-generating power for their daily needs, and on the other hand, it allows them to sell any excess power back to the grid and earn extra income", said Anthony Nyong, Director, Climate Change and Green Growth. The grant will also support the installation of solar PV rooftop systems on government-owned buildings around Kampala, Jinja, Mbale and Entebbe.
Uganda has diverse renewable energy resources that mostly remain unexploited and this grant presents the country with a good opportunity to address the challenges of energy access and reliability of electricity supply, while diversifying its energy mix away from an high dependence on hydro power that is greatly exposed to the negative impacts of climate change events such as severe droughts.
About the Climate Investment Funds (CIF)
Established in 2008, as one of the largest fast-tracked climate financing instruments in the world, the US $8.3-billion CIF provides developing countries with grants, concessional loans, risk mitigation instruments, and equity that leverage significant financing from the private sector, MDBs and other sources. Five MDBs - the African Development Bank (AfDB), Asian Development Bank (ADB), European Bank for Reconstruction and Development (EBRD), Inter-American Development Bank (IDB), and World Bank Group (WBG) - implement CIF-funded projects and programs.
