Uganda news update – Electricity and who pays for it, a balancing act on the high wire


Uganda’s government has apparently made a principal decision to expire diesel propelled power generation plants, just as soon as the Bujagali hydro electric dam goes into operation in November this year. Starting with an initial production of 50 MW this relatively low cost electricity production unit will rev up to a full 250 MW by April or May 2012, at which time thermal plants using diesel will either need to be converted to the use of heavy fuel oil or else be decommissioned as a new production regime will take hold.

At least two diesel plants with a combined capacity of 100 MW are being targeted, noticeably from operators which shut down production two weeks ago over nonpayment of arrears from government, a connection however denied by sources close to the Ministry of Energy. One source in particular said: ‘…when hydro power comes on line, it will be much cheaper and there will be no need to subsidize that electricity for the consumers. We started thermal production in 2006 when in February water levels in Lake Victoria made it impossible to maintain full production at Owen Falls and Kiira in Jinja. Back then thermal production, when it got on line, was about a quarter of our electricity needs but today it has come to almost 50 percent. Those operators require subsidies or electricity would not be affordably for ordinary Ugandans and our industries would close because their products could not compete with imports. Therefore, subsidies now are over a trillion Uganda Shillings per year and this is almost three times as much compared to 2006. It cannot be sustained. The opposition keeps arguing about helping Ugandans to match inflation and devaluation but they are not saying that government is spending so much so that households can afford power. The president was clear when he said that Uganda will not listen to our partners when it comes to electricity production. If Bujagali was ready we would not have these problems. Back then we were told by World Bank and others we should not have too much electricity. Now they are saying the same about Karuma Falls which we want to promote directly from our own resources with a partner we shall select soon. A country can never have enough electricity, especially not us in Uganda. We need to connect our rural areas, new industries are waiting to set up here and we might even be able to export power to South Sudan, to Eastern Congo, to Rwanda and Tanzania. And we need a buffer to cushion against plant maintenance so that power shortages once and for all are a thing of the past. So when Bujagali comes online we shall first expire the diesel plants and then those other plants using heavy fuel oil will be receiving their supplies from our own oil wells when they start to produce.’

Meanwhile though, power rationing continues albeit on a much reduced scale, assisted by an increase in production of 40 MW at Owen Falls and Kiira, where a greater flow rate has been approved until Bujagali comes on line. Balancing on the high wire it seems with a small safety net.

Watch this space.