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Power plants switch off in protest

By Vision Reporter

Added 6th July 2011 03:00 AM

TWO thermal electricity producers have switched off their generators, causing an acute power scarcity and resumption of the daily 12- hour load-shedding.

By Ibrahim Kasita

TWO thermal electricity producers have switched off their generators, causing an acute power scarcity and resumption of the daily 12- hour load-shedding.

Aggreko and Electromaxx shut down the generators after the Government failed to pay them about sh300b, according Eriasi Kiyemba, the managing director of Uganda Electricity Transmission Company (UETCL).

The Government owes the thermal power companies close to sh300b in arrears up to June 2011. The two companies generate 70 mega-watts.

“We need sh50b as subsidy to the energy sector per month.”

Energy minister Irene Muloni said the problem was due to money owed to the independent power producers.

“I was pleading with Parliament to sort out the dues before the situation reached this level (load-shedding),” she said. Muloni appealed to the public to be patient.

The minister lamented that Parliament last week declined to approve her request for funds to pay the thermal power companies.

Kiyemba said continued weakening of the shilling against major foreign currencies, especially the dollar and the euro, has had a huge impact on the diesel-generated electricity.

UETCL has indicated that there is a power supply shortfall of 50MW during day and 120MW during evening hours. This will result into both day and night load-shedding. This is likely to cost the economy $400m in goods and services, according to a senior official at the Electricity Regulatory Authority.

Charles Muhumuza, the Electromaxx chief, said: “We are very aware government is committed to the sector and we are confident that this ditch is temporary and all efforts have been made to overcome the challenges. We are not worried.”

The Ugandan shilling has been trading at an average of sh2,425 against the US dollar compared to the budgetary rate of sh1,874 against the greenback two years ago.

Yesterday the dollar traded at sh2,538.

According to Benon Mutambi, the head of ERA, load-shedding is likely to continue if government fails to raise sh499b for thermal power until the first unit of Bujagali project is commissioned.

‘We need Parliament to approve sh299b to clear the earlier debt obligation (up to June, 2011). We also need more sh200b if we do nothing on the tariffs,” he said.

Dr. Mutambi explained that the rapidly changing fuel prices were a big challenge.

According to the ERA current electricity supply stands at 420MW, but the demand is 450MW. However, Mutambi said power supply is expected to increase by about 90MW in October this year.

Investors react
The Uganda business community has appealed to the Government to ensure that industrial and business areas are spared from day-time load-shedding.

“We depend on power to produce goods,” Kigozi Ssebagala, the Uganda Manufacturers’ Association boss, said.

Gideon Badagawa, the private sector foundation executive director, urged government to reduce taxes on diesel.

Power plants switch off in protest

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