Govt to expand energy access, sh3.9b COVID-19 fund launched

Nov 25, 2020

As a result of the pandemic, off-grid energy service providers had been forced to either lay off staff, halt production or suspend after-sales services.

The Government has committed to extending energy to all Ugandans by 2040.

The commitment was made by the acting commissioner of energy efficiency and conservation department at the energy ministry, Eng. Simon Kalanzi, during the online launch of the euros 900,000 (about sh3.9b) COVID-19 Economic Relief Fund.

Kalanzi said while access to grid energy in Uganda is still low, the Government will support efforts to boost off-grid energy solutions to complement its ongoing endeavours aimed at increasing access to off-grid electricity.

"Not all communities are connected to the grid and over 80% of those in rural areas use biomass fuel. It is thus key for us to foster good systems, especially home solar systems and efficient cooking solutions within those areas. We shall continuously collaborate with EnDev to ensure that these off-grid solar systems are accessible to all households, small and medium enterprises as well as institutions," he said.

Launched by GIZ Energising Development (EnDev) Uganda, in partnership with the Private Sector Foundation Uganda (PSFU), the fund seeks to help off-grid energy companies, including solar and cook stove companies, survive the current crisis.

Kalanzi said as a result of the pandemic, off-grid energy service providers had been forced to either lay off staff, halt production or suspend after-sales services.

"The fund is timely and I urge solar and cook stove companies to take advantage, so as to maximise its benefits to survive the hard times and improve their operations," he said

THE IMPACT
The EnDev Uganda project manager, Anja Rohde, said the fund was conceptualised after realising the negative impact of the pandemic and related restrictions on the sector.

"The outbreak of COVID-19 forced companies in the sector to take drastic measures; many businesses indicated that they were not able to cover for financial losses over a long period of time," she said.

Rohde said it was also discovered that the impact on small and micro enterprises was severe, given that the support mechanisms set up in the last couple of months benefited mostly large companies.

EnDev is a global project in over 20 countries worldwide but with a strong focus on sub-Saharan Africa. Financed by five donor countries, including the Netherlands, Germany, Norway, UK and Switzerland, the project seeks to promote sustainable access to modern energy services.

The PSFU Business Uganda Development Scheme for Energy Rural Transformation director, Eng. Geoffrey Ssebuggwawo, encouraged eligible companies to take advantage of the opportunity to survive the crisis and build resilience.

WINDOWS
Provided by the Germany Federal Ministry for Economic Cooperation and Development, the funds can be accessed through any of the three windows, including the COVID-19 relief, boost resilience and the training upgrade.

The COVID-19 relief window seeks to help mitigate loss of energy access in Ugandan households and companies by temporarily covering the payment of instalments for PAYGO customers and covering expenditures.

The boost resilience window, on the other hand, will fund companies to invest in their infrastructure for production and distribution as well as support upgrading their mid to long-term resilience. The training upgrade window will help pay associations and other training entities in the sector fees for the participation of energy company staff.

ELIGIBILITY
Companies and institutions can apply for funds of between euros 15,000 (about sh65.6m) and euros 100,000 (about sh437m).

Brenda Bitete, the fund manager at PSFU, said beneficiaries must be solar companies, biomass cook stove companies or associations and training entities.

They must have been registered in Uganda for at least a year and demonstrated financial capacity.

For solar companies in particular, it must be a manufacturer and distributor of its own solar products, a third-party solar product distributor or a Uganda Solar Energy Association member.

Its products must have at least a one-year warranty and after-sales services. It must be using lithium-based battery or deep-cycle, long life leadacid batteries and must be sold to end-consumers on commercial basis.

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