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Govt instructs the three electricity companies to merge

Mary Goretti Kitutu

Mary Goretti Kitutu

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Rural Electrification Agency to become a ministry department

The government of Uganda has mooted a number of changes in the electricity subsector, and is set on implementing them. This was disclosed by Mary Goretti Kitutu as she presented the performance of the energy and mineral development sector in the implementation of the NRM Manifesto 2016-2021 on Thursday, May 6, 2021.

Kitutu was speaking as the then minister of Energy and Mineral Development. Among the outstanding announcements by the minister was that the government has instructed the three companies in the electricity subsector to merge their operations within three years, so as to achieve greater efficiency.

The three companies were carved out of the parastatal corporation known as Uganda Electricity Board (UEB) when Uganda decided to liberalize the subsector in 1997 and the new Electricity 1999 was assented to by the president. They serve three arms/functions of the subsector; namely generation (Uganda Electricity Generation Company Ltd [UEGCL]; transmission (Uganda Electricity Transmission Company Ltd [UETCL]; and distribution (Uganda Electricity Distribution Company Ltd [UEDCL].

Kitutu said these three companies will become one company with one board, adding, “The Rural Electrification Agency is going to be a department under the ministry.”

She then broke her speech into seven sections. 

A. SUSTAINABLE PETROLEUM DEVELOPMENT PROGRAM

The minister reported that the Government is monitoring and supervising petroleum exploration activities by Oranto Petroleum Limited (in the Ngassa Shallow and Deep Play contract areas) and Armour Energy Limited (in the Kanywataba Exploration Area).

Following the signature of various agreements for the East African Crude Oil Pipeline (EACOP), construction of infrastructure for production, processing and transportation of crude oil is now expected to commence at the end of 2021.

On geological, geochemical and geophysical surveys, Government acquired 60 line-km of geophysical data and undertook 300 sq. km geological and geochemical mapping of Moroto-Kadam basin, bringing to a cumulative coverage of 3,700 sq. km of geological and geochemical data and 680 line-km of geophysical data amounting to 65 percent basin coverage. Oil seepage was mapped and it confirmed existence of a working petroleum system and a possibility of exploitable hydrocarbons thereof.

Regarding the refinery development, Government is participating in the Front End Engineering Designs (FEED) study for the refinery project, which is being undertaken in Milan, Italy.

The FEED is expected to be completed in July 2021. The RAP study for the Refined Products Pipeline from Hoima to Mpigi is at 95% complete; Cabinet approved the extension of the PFA from 24 months to 41 months to enable finalisation of FEED, ESIA and sourcing of financing; and Government in April 2018 entered into a Project Framework Agreement (PFA) with the Albertine Graben Refinery Consortium (AGRC) as the Lead Investor to develop a 60,000 BOPD in Kabaale, Hoima. 

B. POWER GENERATION, TRANSMISSION AND DISTRIBUTION INFRASTRUCTURE

On electricity generation capacity, the minister said over the last five years, electricity generation capacity increased from 810MW to 1,260.7MW. This was mainly from the 183MW Isimba HPP, Agago Achwa II 42MW, Siti II16.5MW, Kyambura 7.6MW and Nagutu 5.9MW.

Eleven additional power generation projects are under construction with a total installed capacity of 712.4MW. These are: Karuma HPP (600MW), Nyamasagani I HPP (15MW), Nyamasagani 2 HPP (6MW), Kikagati HPP (14MW), Achwa I (41MW), Muyembe (6.9MW), Nyagak III (5.5MW), Muzizi (44MW), Bukinda (6.5MW), Kakaka (4.6MW) and Busitema University solar (4MW). Once completed, total installed power generation capacity in the country will be nearly 2,000MW.

Kitutu said the transmission network expanded by 13% to cover 2,989km as at end of 2020. She attributed the increment to the commissioning of the following transmission lines:

  1. 137km, 220kV Kawanda – Masaka transmission line.
  2. 65km, 220kV Mbara – Mirama transmission line
  3. 226km, 220kV Nkenda (kasese) – Hoima transmission line
  4. 115km, 132kV Lira – Opuyo (Soroti) transmission line.
  5. 42km, 132kV Isimba – Bujagali transmission line; and
  6. 157km, 132kV Mbarara – Nkenda transmission line 

To increasing access to electricity, some 2,550km medium-voltage networks, and 2,596km of low-voltage networks were added onto the grid. In addition, 252,460 connections were achieved under the Electricity Connections Policy since it was launched in 2018.

A total of 15,000 ready boards have also been completed for the first phase. Government has also commissioned electricity transmission substations with transformation capacity of 440MVA that include Queen’s way, Masaka, Mbarara North, Hoima, Iganga, Mukono, Namanve, Luzira, Kapeeka and Kawanda. Also, electrification of 570 out of 620 sub-counties to accelerate access is on progress.

C. PROMOTION OF RENEWABLE ENERGY SYSTEMS:

Kitutu said over the last five years, the ministry has continued to promote the use of renewable energy technologies in the country with a view to broadening the power generation mix. This has been mainly through the following projects:

Biofuel Development and Promotion: The Biofuels Act, 2020 was published in the Uganda Gazette of August 2020 and draft Biofuels Industry Regulations have been developed. The objective of the regulations is to set out the requirement for licensing the biofuel producers, and the oil companies to enable blending of biofuels with petroleum products.

NAMA Biogas Project: The ministry is implementing NAMA biogas project with the aim of generating electricity from municipal solid and liquid waste in the cities of Mbale, Jinja, Masaka, Mbarara and Kampala Capital City Authority.

Solar fruit driers were constructed and installed in Kikyusa, Luweero district to facilitate fruit drying and crop value addition. In Kasese district, construction of a solar dryer at Nyakatonzi commenced. This dryer will be used to serve as a demo to the surrounding areas.

A total of 60 solar street lights were installed in Nagongera Town Council, Lumino Town Council, Buikwe Town Council, Rwentuha Town Council and Mukono Municipal Council.

Solar lighting and solar mosquito killers in schools and health units were installed in Gangmig Primary school, Barotukei Primary School, Awach Secondary School, Gotapwou Primary School, Golotwolo Primary School, Bukewa Health Center III, Lwanjusi Health Center III, and Bugobero Health Center III.

An electric engineer at work

D. NUCLEAR ENERGY DEVELOPMENT:

The minister said technical and economic studies on nuclear energy development were completed. A National Radioactive Waste Management Strategy was drafted.

An MoU between Ministry of Energy and Mineral Development and the Russian State Atomic Energy Corporation Rosatom on peaceful uses of atomic energy was signed on 19th June 2017. The MoU focuses on development of nuclear power infrastructure, education and training, nuclear and radiation safety, non-power application of atomic energy, nuclear research centers and design and construction of nuclear power plants.

Another MoU was signed between Ministry of Energy and Mineral Development and China National Nuclear Corporation on nuclear energy development, on 11th May 2018 in Beijing, China. A nuclear power roadmap was prepared and a stakeholder’s consultative meeting held from February, 20 to 21, 2020.

E. PROMOTION OF ENERGY EFFICIENCY AND CONSERVATION:

Government continued to promote the efficient utilisation of energy through promotion programs which aim at ensuring sustainable utilisation of energy in all sectors of the economy.

Hence the Energy Efficiency and Conservation Bill and the corresponding Regulatory Impact Assessment (RIA) were prepared and will be resubmitted to Cabinet for approval after the lockdown. Power distribution loss was reduced from 18.6% in 2016 to 16.8% today. Government installed power factor correction equipment in 45 clusters of small and medium enterprises

Some 30 Ugandans were trained and accredited as internationally certified energy auditors, and 20 professionals were trained as ISO 50001 lead energy auditors. The ISO 50001 Energy Management Standard for high energy consumers was integrated in their industries and facilities.

Seven hundred thousand (700,000) Light Emitting Diode (LED) bulbs were distributed for free to electricity consumers. Sustainable energy campaigns were held such as the annual Energy Week and quarterly regional campaigns across the country. In addition, the Energy Efficiency Roadmap of Uganda was developed in 2017.

F. MINERAL DEVELOPMENT PROGRAM:

Kitutu said tremendous progress in mineral exploration, development and value addition has been made as indicated by: (a) The Mining and Minerals Bill, 2020 which will address key challenges and bottlenecks in the mineral sector was approved by cabinet on April 12, 2021 and it will be tabled in parliament for discussion; (b) An online mineral licensing platform which eliminates the delays of the paper-based licensing system has been developed.

Further, to regulate illegal exploitation of natural resources, Government has commenced on the drafting of Regulations that will enable implementation of the International Conference on Great Lakes Region (ICGLR) Mineral Certification Mechanism.

Government has promoted investment in its mineral resources and attracted private funding that ran successful exploration programmes. The projects are now at mine development stage.

These projects are: Wagagai Gold Project in Busia; Graphite Project in Orom, Kitgum; Rare Earth Elements (REE) Project in Makuutu, Bugweri district; Jervoir Base Metals in Rwenzori, Kiboga and Karuma; and the Nickel Project at Akelikong, Lamwo district.

The Government has contracted X-Calibur, a Spanish company, to carry out aerial surveys of Karamoja sub-region to establish the mineral potential of the area. These commenced in March 2021.

Government also set out to establish the geological and mineral potential of the country. So, 103 million [metric?] tonnes (MT) of iron ore in Kabale district and 15MT in Rubanda district have been established, bringing the total iron ore reserves in southwestern Uganda to 318 MT with estimated resource of up to one billion tonnes.

The iron ore in Kabale and Muko is associated with gold, nickel, zinc, tin, titanium and wolfram. A feasibility study for establishment of an integrated iron and steel plant in Uganda has been done.

Government also set out to formalize artisanal and small-scale mining. Hence, over 13,185 artisanal and small-scale miners were registered in Mubende, Kasese, Kabarole, Ntungamo, Karamoja and Eastern Uganda.  They were trained in best mining practices, environment, health and safety in mining and business skills.

Geothermal investigations were initiated. Eight temperature gradient holes were drilled at Kibiro in Hoima district. The data and information will be the basis for drilling deep exploration wells.

Surface studies at Panyimur, Buranga and Katwe have been completed and geothermal conceptual models developed for Panyimur and Buranga. The models will be used to locate drilling sites. Environmental and Social Impact Assessment (ESIA) is being undertaken at Panyimur and Kibiro before deep exploration drilling is undertaken.

Government established a functional mineral analysis laboratory at Entebbe, and new equipment (ICP-OES & Iron Chromatography) is being added.

Government put in place an inter-ministerial committee to identify a private investor for the development of the Kilembe Mines Project. The process of identifying the investor under a public-private partnership has commenced. Draft Expression of Interest and Request for Proposal have been prepared.

G. PRIORITIES FOR THE NEXT FIVE YEARS (2021-2026):

Kitutu said in order to contribute effectively to the national economic recovery, the sector has identified within its policy goals the key areas of focus as follows:  

In the energy resources subsector, focus will be to develop power generation, transmission and distribution infrastructure to support value addition; reduce the cost of power perticularly for  manufacturers to five cents per unit from 8.7 cents; promote renewable energy and energy efficiency as a priority; and reduce the share of charcoal and firewood from 85% to 50%.

In the oil and gas subsector, emphasis will be on construction of production, transportation and processing infrustructure; while in the mineral development subsector, it will be completion of the airborne geophysical survey of the Karamoja sub-region, putting in place a modern mineral laboratory as well as mineral beneficiation centers in the country, and value addition to the mineral reserves being discovered.

© 2016 Observer Media Ltd