GOVERNMENT | POWER | CONNECTION | COSTS

In collaboration with the Global Energy Alliance for the People and Planet (GEAPP), the government has established a hybrid electricity connection financing network aimed at customers who pay a reduced fee.

With effect from yesterday (14), the management of the Electricity Regulatory Authority announced that the government has provided a subsidy amounting to shillings 250,883 for no-pole electricity connections, and, therefore, the cost has been reduced from the current sh720,883 to sh470,000.

“This can be paid in two ways, as illustrated: Option 1 entails the customer making a shillings 200,000 down payment and being granted a credit facility of sh270,000, which is recovered by the utility company as a 15% proportion of each bill payment made by the customer over an eight-year period. 

"The other is that customers who can afford an upfront total payment of sh470,000 can pay all at once and get connected to electricity,” says a notice.

In today’s New Vision, the management said those whose premises are next to the existing contribution, a subsidy by the government of Uganda, and a credit to their accounts payable through monthly energy purchases over eight years.

Barriers to power connections

The Uganda Bureau of Statistics 2019 conducted a study, and it was observed that one of the main obstacles to households getting connected to the national grid was the high cost of the initial connection.

The hybrid electricity customer connection credit framework is based on the 2020 connection costs of a no-pole connection (shillings 720,883) approved by the Electricity Regulatory Authority (ERA) and will be implemented as follows;

The customer will make a down payment of shillings 200,000 as a contribution towards their connection.

The second proportion of sh270,000 will be taken as a credit line that will be recovered as a 15% proportion of every bill payment by the customer.

The last portion of shillings 250,883, the credit interest, and any bad debt are to be considered a subsidy to the customers.

The Uganda Development Bank (UDB) will finance the sh270,000 and allow for the recovery of this money in a period not exceeding 8 years.