Poor to get subsidized electricity connection

By Simon Masaba

Over 1,000 households in rural Uganda will be connected to the national power grid. This follows the unveiling of a $5.5m (about sh13b) World Bank grant aimed at subsidising electricity connections for about102,200 low-income households across the country.

The grant agreement was last week signed between Uganda and the International Development Association on behalf of the Global Partnership on Output-base Aid (GPOBA).

Maria Kiwanuka, the finance minister, said the four-and-half-year project would be managed by the Rural Electrification Agency (REA).

It will initially start with six service providers licenced and approved by the Electricity Regulatory Board Authority to participate in the output based aid (OBA) scheme.

“With only 12% of Ugandans, mostly in urban areas, having access to electricity and only 5% in rural areas, the country needs to focus its sector strategy to those with the least access, who are also the poorest people,” Kiwanuka said.

OBA is a pro-poor approach that helps low income households access basic services, including electricity.

Kiwanuka added that by extending power access to poor households, the scheme complements the objectives of the World Bank’s Energy for Rural Transformation project.

She revealed that the scheme would pilot the OBA approach in grid-based electrification, which provides for output-based subsides for utilities that provide pro-poor connections.

“The facility will also provide flexibility for future funding from other development partners and the Government,” Kiwanuka noted.

The World Bank country manager, Moustapha Ndiaye, said the scheme would support four types of no-pole connections for poor households.

Homesteads that can afford to install internal wiring in their homes before connection will get conventional postpaid and pre-paid meters.

“Households that cannot afford to install internal wiring at the time of connection, will be given ready-boards with pre-paid meters for homes that plan to wire their houses after connection,” Ndiaye said.

He added that the poorest households that cannot afford internal wiring will be provided load-limited ready-board connections.

“We are enthusiastic about using an innovative approach to help meet the needs of a population that cannot afford to pay for access to basic electricity services,” pointed out Godfrey Turyahikayo, the REA executive director.

Kiwanuka revealed that households that qualify for OBA connection subsides would be identified through two approaches. There will self-selection, which includes households that will not have connected to power for over 18 months after the area has been electrified.

Another approach will be according to location, where eligible households will be identified through detailed poverty mapping, particularly in rural areas. The project will have an independent verification agent who will ensure that only needy homes are chosen before the subsidy is paid.

This is aimed at insulating the project against any abuses.