Power in Uganda: Overcoming the main constraints to efficient growth

Project Active from to Energy

In 2001, the Government of Uganda (GoU) created the Electricity Regulatory Authority (ERA) to independently regulate the power industry. Also, the GoU restructured the previously vertically integrated power industry into the segments of power generation, transmission and distribution. This was done to improve efficiency in the regulation, planning and development of power programs and projects. The restructuring paved the way for private sector participation in the development of power generation and distribution facilities. The government-owned utility, Uganda Electricity Transmission Company Limited (UETCL), is the designated national grid operator responsible for the purchase, transmission, export and import of bulk electricity.

Following the restructuring, the percentage of the population connected to the electricity grid increased from 5% in 2002 to 20% in 2015. The bulk of the electricity is consumed in urban and semi-urban areas, while most of the areas within the rural districts are not yet connected to the national grid.

According to ERA, electricity demand in Uganda grew at an average annual rate of 10% during the period of 2010 – 2016. GoU has identified reliable and affordable electricity as a key ingredient for the transformation of Uganda from a predominantly peasant society in 2007 to a competitive upper middle income nation by 2047.

Uganda is currently experiencing significant constraints within the power industry that are hindering its ability to achieve the transformation agenda. Some of the factors that are constraining the electricity value chain include: human resource capacity deficit; lack of verifiable industry data; environmental and social issues; inadequate supporting infrastructure and services; difficulties in the coordination of multiple agencies that have independent mandates; low demand in several areas making it difficult to justify grid extension; and insufficient financial resources for capital intensive electricity projects. These and other factors are leading to inadequate preparation, unsatisfactory implementation, delays, budget cuts, budget over-runs and postponement of power projects.

The main objective of this study is to appraise certain constraints that are impacting the power industry. The appraisal will involve reviewing available industry literature, and interviews with some key stakeholders. The study aims to present recommendations on how to manage these constraints in order to realise the objectives of the Uganda power industry.