Uganda signs PPA for new geothermal power plant


Uganda’s Ministry of Energy has signed a power purchase agreement with American company AAE Systems, pre-requisite to entering the construction phase. PPA’s were one of the lender’s key requirements to avail finance for the new 150 MW geothermal power plant, which according to local media reports is due to go on line within 24 months.

With the next power deficit already creeping up on the horizon, a scenario business association representatives have expressed concerns to government in no uncertain terms, the introduction of this ‘green technology’ will go a long way to add electricity at more affordable prices, compared to the hugely expensive thermal power plants using diesel of heavy fuel oil.

The plant will be constructed at Katwe, a location in Kasese District and just outside the Queen Elizabeth National Park, where reportedly tests have confirmed easy access to subterranean heat sources.

In Kenya geothermal energy has long been exploited and the present power plant near Mt. Longonot is undergoing substantial expansion while additional new geothermal plants are under construction near Nakuru.

The notorious loadshedding by the monopolist national electricity distributor UMEME has reduced after the commissioning last year of the Bujagali hydro electric power plant on the upper Nile, although regular power outages are attributed not just to a rotten distribution network but, besides increasing power theft as a result of extremely high tariffs, also to the newly added capacity already being absorbed at record rates.

The overdue start of construction of the 600+ MW Karuma Falls hydro electric plant has repeatedly been delayed as a result of allegations over corrupt practices in the selection of contractors, which brought the matter before the Ugandan courts and no end in sight of the wrangles. For that reason is the news welcome that Uganda is not only going for ‘green technology’ – geothermal power is renewable and sustainable – but also for the fact that a further 150 MW may become available before wide spread loadshedding would once more disrupt manufacturing industries as well as domestic life.

Only last month did similar news break from Rwanda, where some 25 million US Dollars were set aside for initial test drilling, leading to early geothermal power production, a clear sign that at last East Africa’s government have started to appreciate the potential of renewable energy sources from underground.