Uganda Power Purchase Agreement

By April 13, 2021 Uncategorized No Comments

The use of NSSF funds, which would have been cheaper and faster to move Bujagali forward, had been strongly rejected. Clearly, this decision was not well informed. It denied nSSF/worker the opportunity to participate in a potentially lucrative project. Today, NSSF invests in certain energy projects and achieves good returns. In the meantime, other solutions had to be found to free the country from the electricity shortage. The first power plant coupled with the private sector grid was the Kakira/Madhvani cogeneration plant, which took place for several years in the negotiations. It finally ended in the early 2000s with the support of the first phase of energy for rural transformation (ERT 1). An energy contract has been signed. These challenges are not solved by rewriting the existing PPAs per se. Similarly, increasing barriers to entry for private sector investment is not the answer.

Just as the prosecution will not give the sector the desired solutions. On the contrary, we must ensure that quality supply is currently one of the main problems to which we must find an urgent solution. It is therefore necessary to give priority to investments in the modernisation and development of transport and distribution networks, as well as in substations and transformers. Second, the structure of demand and the use of our power requires some political direction to ensure better consumption of what is produced at all times. Third, a number of potential demand centres, such as industrial parks, agri-industrial centres, mining areas, tourist sites, the standard rail route (SGR) and the pipeline, have yet to be connected. These will certainly erase this perceived surplus. The Electricity Act 1999 was passed to allow private sector investment in the energy subsector. With this policy and legal framework, the government could attract private sector investment in Uganda`s energy subsector. Uganda was then seen as a non-competitive investment target. Indeed, as people may like, each investor will always assess the risk and assess whether they will invest in Uganda or elsewhere in the world.

If he sees a probability of loss, the investment is over. Investments in energy infrastructure require significant capital that was not available in Uganda at the time. Multilateral donors, including the World Bank, had stopped lending directly to governments for the development of hydropower. This is how the idea of “independent power producers” (IPPs) was born to develop these projects. The situation. It has been argued that the AAE clauses are costly to Ugandan taxpayers, as a considerable amount of electricity generated is not consumed due to low demand and limited access to electricity. These challenges are not solved by rewriting the existing PPAs per se.