UEGCL vows to bring down electricity tariffs

By John Odyek

KAMPALA - The cost of electricity generated in Uganda will be reduced over the next three years, Dr. Stephen Isabalija, the chairman of Uganda Electricity Generation Company Ltd (UEGCL), has promised.

Isabalija also pledged to increase by 50% the quantity of electricity produced over the next three years.

“We must bring down our generation tariffs. This will translate into lower costs for our consumers. Our stakeholders in generation are supportive of this. No investor will come to Uganda when the cost of power is high,” he said.

Isabalija made the remarks during the launch of the UEGCL “New Vision and Strategic Direction 2015-2017” at the Kampala Serena Hotel, on Friday.

He explained that the cost of power produced by independent power producers stood at more than $11cents, whereas power generated by UEGCL sold at $1.2 cents.

Independent power producers include Bujagali Energy Limited. The Government’s target is to sell power from generation plants at not more than $5 cents.

 Isabalija said the Government has adopted a new energy policy direction, which gives UEGCL the mandate of implementing agency for the construction of Government flagship projects of Karuma (600MW), Isimba (183) MW and Ayago (600MW).

UEGCL’s strategic direction indicates that Karuma hydroelectricity plant will be 85% complete by 2017, Isimba HEP will be completed by the end of 2017 and construction of Ayago is slated to start by the end of 2016.

UEGCL is implementing other small hydropower plants such as Nyagak III (5MW), whose construction will start in May 2015 and Muzizi (44MW), which will be constructed in 2016.

For sustainability, UEGCL has plans of diversified growth and have a mix of renewable energy resources including Geothermal.

The strategic plan emphasizes learning and growth as one of the balanced scorecard tool.

A training centre to build leadership and staff capacity on operation and maintenance of hydropower plants will also be established, according to Dr. Isabalija.

It will also train youth to operate the upcoming new generation plants, which he said, will help in reducing unemployment.

Previously, UEGCL was only mandated to supervise the power generation concession agreements for Nalubaale and Kiira power plants in Jinja.
 

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From left, Isabalija, Muteekanga, Omach and MP Kyadondo North Kasule Sebunya at Serena Hotel, Kampala on Friday. (Photo credit: Wilfred Sanya)

Isabalija noted that Uganda lags in third position in power generation in the East Africa region behind Kenya as the leader and Tanzania. He added that Uganda’s power generation efficiency was also poor at 61% while Tanzania is 65% and Kenya at 78%.

Finance general duties minister Fred Omach, who represented the finance minister, Maria Kiwanuka, to launch the strategic plan said there was need to reduce heavy reliance on firewood.

“The current coverage of electricity is estimated at 12% of Ugandans. We, therefore, need to ensure that those currently without sustainable electricity are served.”

He added that Uganda’s Vision 2040 targets to increase electricity coverage to 80%, and annual per capita consumption from 75 Kwh/Capita in 2010 to 674 Kwh/ Capita in 2015.

This requires an additional 3,500MW to Uganda’s existing national grid.

“The Government will use public-private partnerships as an important option for delivering public infrastructure projects and services. It will be fast tracked with the enactment of the Public Private Partnership Bill 2012,” Omach said.

Dr. Eng. Harrison Muteekanga, the UEGCL chief, said the company has been characterised by low levels of operational efficiency, poor financial health, lack of investment in new generation facilities and insufficient licensing of its mandated activities.

UEGCL is one of three companies curved out of the ailing former Uganda Electricity Board 14 years ago. It was mandated to establish, acquire, maintain and operate electricity generation facilities on sound business principles.

He said UEGCL will be the leading power producer in the Great Lakes region, and power will be reliable, of quality and affordable to spur development.

The new strategy, he said, will also increase use of renewable energy from the current 4% to 61% of the total energy consumption by 2017.

It also hopes to grow revenues by a 45% annual average to fund major infrastructural projects and turn around losses from sh11b to a sh2b profit in three years.