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KAMPALA - During the just concluded  Uganda European Business Forum held in Kampala from March 5th to 7th, the Uganda Energy Ministry seized the opportunity to showcase the vast investment potential in the country's energy sector.

With a strategic focus on attracting European venture capitalists and investors, the Ministry presented a compelling case for partnership and collaboration in advancing Uganda's energy landscape.

Over three days, at the prestigious Speke Resort Munyonyo on Lake Victoria shores, stakeholders from both Uganda and Europe engaged in fruitful discussions, exploring avenues for sustainable investment in various sectors of Uganda's economy.

The Energy sector emerged as a focal point, drawing significant attention from European investors keen on exploring new opportunities in Africa.

Ministerial representatives highlighted Uganda's commitment to renewable energy initiatives, emphasizing the government's efforts to diversify the energy mix and promote green technologies.

With abundant natural resources and a conducive investment climate, Uganda offers a promising environment for ventures in solar, hydroelectric, and other renewable energy projects according to Sidronius Opolot Okaasai, the Minister of State for Energy.

Okaasai assured investors that Uganda is blessed with a variety of renewable energy resources, and these include plentiful biomass and hydro, solar, Wind, and geothermal resources.

These renewable energy sources, he stated, are abundant and can be harnessed in various locations within the country, making them a promising solution for a sustainable future.

Prime Minister Robinah Nabbanja remarks. (All Photos by Mpalanyi Ssentongo)

“However, as we continue to explore and develop new energy sources, the types of energy infrastructure continue to evolve. We are beginning to see advancements in technologies like Hydrogen energy where hydrogen is used as fuel for electricity generation and, bioenergy, where organic matter is converted into fuel. The possibilities are endless as we strive to create a more diverse and resilient energy system,” he noted.

Notwithstanding, Okaasai emphasised the need for enabling energy Infrastructure which plays a crucial role in powering societies and driving economic growth.

Without energy infrastructure, he said modern society would come to a standstill. He noted, “Imagine a world without electricity, where we couldn't power our homes, charge our devices, or run our industries. I therefore encourage you to interest yourselves in in sector so that we can together combat the challenges in Uganda’s energy infrastructure,” he said.

Prime Minister Robinah Nabbanja who closed the Third Uganda European Union Business Forum on Thursday emphasized the government's commitment to supporting European investors.

She assured the forum that Uganda is keen to address any concerns European investors might have.

Nabbanja welcomed the eight financial initiatives worth euros 218m that were launched by team Europe and Uganda to support development in different sectors including agriculture, climate change and human rights, and infrastructure initiatives, among others.

She said that the projects will go a long way in boosting the economy and creating jobs. “I want to assure our potential investors that the government will do anything possible to facilitate you to set up your investments in this country,” she stated.

Evelyn Anite, the state minister for investment reiterated that Uganda’s investment climate is very favourable, with the rate of returns enjoyed by investors, averaging 13.8% in 2022, the highest in the EAC and the 4th in Africa.

She also appealed to EU investors to invest in Uganda but also underscored the contribution of the EU investors to Uganda’s FDI.

Anite said that already, three investors have already committed to investing in Uganda’s electronic mobility and hydropower generation.  

Challenges in Uganda’s energy infrastructure 

Minister Okaasai in his speech at the Forum highlighted several challenges that face the sector and underscored the need to join hands with investors to combat them.  

Ageing infrastructure 

While energy infrastructure is vital for society's functioning, he said it faces numerous challenges that need to be overcome.

“The ageing infrastructure, for instance, poses reliability and safety concerns. In Uganda we are currently struggling with this, especially in the transmission and Distribution sub-sectors we also have a few power plants that have exceeded their intended lifespans like the Nalubaale and Mobuku 2  Hydro Power Stations requiring upgrades and modernizations to meet our growing energy demands,” he said.

As this infrastructure ages, he noted that the risk of failures and disruptions increases. Outdated equipment, worn-out components, and inadequate maintenance, he said, can result in power outages and system failures, causing significant inconvenience and economic losses.

To address this challenge, he told the Forum that investments in infrastructure upgrades and replacements are necessary to ensure the reliability and resilience of our power systems.

One example of the impact of ageing infrastructure he cited is the increasing occurrence of blackouts and brownouts in certain regions.

He said these power outages not only disrupt daily life but also have severe consequences for critical services such as hospitals and emergency response systems.

Upgrading this infrastructure, Okaasai reiterated, can help mitigate these risks and ensure an uninterrupted power supply to support essential services.  

New technologies 

The evolution of energy technologies, such as the integration of renewable energy sources, presents new challenges in adapting the existing infrastructure.

The intermittent nature of renewables, for example, requires a more flexible and robust grid to accommodate fluctuations in power supply and demand.

As such, minister Okaasai said upgrading the infrastructure to accommodate these changes is essential to harness the full potential of renewable energy and achieve a sustainable future.

“As I mentioned earlier, investing in smart grid technologies is another crucial aspect of upgrading energy infrastructure. Smart grids enable real-time monitoring, control, and optimization of energy generation, distribution, and consumption. They can enhance the efficiency, reliability, and resilience of the energy infrastructure. These upgrades not only improve the overall performance but also enable better integration of renewable energy sources and facilitate demand response programs,” he noted.  

Balancing energy demand and supply capacity 

Another challenge in energy infrastructure according to the energy ministry is balancing the ever-increasing energy demand with the available supply capacity.

As our population grows, industries expand, and technology advances, the electricity demand continues to rise. Meeting this demand, Okaasai said, requires expanding and upgrading energy infrastructure to ensure adequate supply and avoid bottlenecks.

“One approach to address this challenge is through the diversification of energy sources. That is why Uganda is currently looking at other resources like geothermal, wind, solar, and eventually nuclear to rule out over-dependency on the hydropower resource. This diversification not only reduces dependence on a single energy source but also enhances the resilience of the system against disruptions or price fluctuations,” he said.

During the discussions at the Forum, stakeholders in the energy sector resonated that the transition towards renewable energy sources introduces the challenge of reconciling the intermittent nature of renewables with the need for constant and reliable power supply.

They said implementing innovative energy storage solutions, such as batteries or pumped hydro storage can help bridge the gap between energy demand and intermittent supply, ensuring a stable and resilient energy infrastructure.

Additionally, demand-side management strategies play a crucial role in balancing energy demand and supply. By incentivizing energy efficiency measures, promoting energy conservation, and implementing demand response programs, the energy infrastructure can optimize the utilization of available resources and reduce the strain on the grid during peak demand periods according to stakeholders.

The challenges faced by energy infrastructure are multifaceted and require comprehensive solutions. Upgrading ageing infrastructure, integrating renewable energy sources, investing in smart grid technologies, and balancing energy demand and supply capacity, stakeholders agreed, are all critical steps toward building a resilient, reliable, and sustainable energy infrastructure for the future.

But Okaasai emphasised that all these solutions require massive resources, good policies in place, and concerted efforts from Government, private sector, and development partners.  

Areas of investment and partnership that minister Okaasai listed for  investors include:

Energy Storage Systems 

Currently Uganda in partnership with our development partners is undertaking mini-grids in remote and hard-to-reach areas.

“It is important that Energy Storage Systems are put into consideration to be part and parcel of the mini-grid systems. I know this would increase the prices of these systems and thus the end user tariff but would make the systems more viable,” Okaasai said.

He also pointed to battery storage systems that are becoming more efficient and affordable, enabling the storage of excess energy generated by solar panels or wind turbines.

This stored energy, he said, can then be utilized during periods of high demand or when renewable energy generation is low, ensuring a continuous and reliable power supply.
 

E-mobility 

According to minister Anite, the trend of electrification is gaining momentum, with various sectors, transitioning towards electric solutions.

She said that electric vehicles (EVs) are becoming more prevalent, requiring an expanded charging infrastructure to support their widespread adoption.

“The development of fast-charging technologies and the deployment of charging stations across cities and highways are becoming very important in Uganda and the world over. These are very crucial in facilitating the transition to electric transportation, reducing greenhouse gas emissions, and improving air quality,” she noted.  

Smart grids and advanced metering infrastructure 

With the focus on building robust transmission and distribution networks, Smart grids and advanced metering infrastructure (AMI) must be made integral to the future of our energy infrastructure according to Okaasai.

These technologies, he said, enable real-time monitoring, two-way communication, and data analytics, improving operational efficiency and grid resilience.

“Smart meters, for instance, provide consumers with detailed insights into their energy consumption, empowering them to make informed choices and optimize their energy usage,” he said.  

Net metering 

Smart grids facilitate the integration of distributed energy resources, such as rooftop solar panels and community micro-grids.

According to Okaasai, these localized energy systems empower communities to generate, store, and share their electricity, reducing reliance on centralized power plants and enhancing energy security.

In the event of a natural disaster or grid outage, he said microgrids can operate independently, providing critical power to essential services and ensuring the resilience of the energy infrastructure.

“Our amended law allows for this, and our regulator is currently working on regulations for Net metering,” he revealed.  

Statistics 

The Government’s policy objective on energy is to ensure an adequate and reliable supply of energy as well as universal access to modern energy services (like electricity) to support industrialization, social and economic growth using our natural resources as engines of growth according to Okaasai.

To achieve the targets set in Vision 2040, he said Government is developing and generating modern energy to drive the industry and services sectors.

“Currently, our installed capacity stands at about 2000MW, our transmission network at about 4831km, and distribution network at over 76,922km,” Okaasai reported.

The Uganda European Forum reaffirmed Uganda's position as an attractive investment destination, showcasing the country's potential to harness energy resources for socio-economic development.

EU ambassador Jan Sadek, who was the main convener of the forum confessed that it was a spectacular moment for the forum, as one would think that the forum was being held at one of the seven wonders of the world.

According to him, the high-level forum themed "Boosting Trade and Investments: What can Uganda gain from the Global Gateway?", has served as a platform for collaboration between Ugandan and European businesses and government representatives.

With a collaborative spirit and a shared vision for a sustainable future, Ambassador Sadek said Uganda and Europe are poised to embark on a transformative journey in the energy sector, unlocking new opportunities and driving inclusive growth.