This presentation performs a concise review of Uganda's energy sector with a core focus on current energy installations in the country. An assessment of sector policies in consideration and funding mechanisms is also done. The presentation ends with a series of proposed solutions which can boost Uganda's energy sector.

1. Energy
Infrastructure
Development
and Financing
(Uganda)
Prepared By
Sasaenia Paul Oluwabunmi, PMP, MIET
for the
Financing For Development (World Bank MOOC)
8th of December, 2015

2. Overview
• The Country - Uganda
• Uganda’s Energy Profile
• Uganda’s Current Energy Situation
• Energy Financing Situational Analysis
• Energy Financing Institutional Framework
• Energy Sector Policy
• Energy Sector Funding
• Developmental Funding Constraints
• Proposed Responses to Energy Sector Issues
• Conclusions

3. The Country - Uganda
• In 2012, according to World Bank
estimates, Uganda's gross national
income (GNI), was USD 17.6 billion,
equivalent to USD 480 per capita.
• Uganda has established a strong record
of prudent macroeconomic management
and structural reform over the past two
decades.
• Uganda is regarded as having an open,
deregulated economy, with conditions
favourable to investment especially in
relation to developmental financing.

4. Uganda’s Energy Profile
Sources: Encyclopedia of the Earth (2015). Energy Profile of Uganda.
Uganda Ministry of Energy and Mineral Resources (2012). Discovery of Oil in Uganda.
Renewable Energy Focus (2010). Uganda’s Renewable Energy Potential.
World Bank (2013). World Development Indicators.
United Nations Environment Program (2012). National Workshop on Promoting Sustainable Solutions for Africa.
ENERGY POTENTIAL
Wind Unascertained
Solar 200 MW
Geothermal 450 MW
Peat 800 MW
Biomass 1,650 MW
Hydroelectricity 2,200 MW
TOTAL 5,300 MW
ACTUAL INSTALLATION
Wind Nil
Solar Negligible
Geothermal Nil
Peat Unascertained
Biomass 125 MW
Hydroelectricity 680 MW
TOTAL 810 MW

5. Uganda’s Current Energy Situation
• Despite, its abundant energy
potential, Uganda is an energy
poor nation with limited access
to electricity.
• The sector provides a major
contribution to Uganda’s
Treasury.
92%
2%
6%
Current Energy Supply Mix in Uganda
Biomass
Hydro Power
Fossil Fuels
0
5
10
15
20
25
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
Uganda Oil Consumption
Uganda Oil Consumption
(thousand barrels per day)

6. Energy Financing Situational Analysis
• The current energy financing
pattern is not sustainable because it
relies heavily on non-renewable
energy which is costly, limited, and
has serious environmental effects.
• This pattern further denotes the low
level of industrialization and
commercial production in the
country.
• In order to create a favorable
investment climate and attract
heavy investments in the industry
sector, there is also a need for policy
reform to ensure sufficient
electricity generation capacity is
created.
Electricity Generation Projections (Ugandan Govt.)
YEAR CONSUMPTION
(KWH/CAPITA)
CAPACITY
(MW)
2010 75 425
2015 674 3,885
2020 1,273 8,601
2025 1,872 14,670
2030 2,470 22,222
2035 3,069 31,252
2040 3,668 41,738

7. Energy Financing Institutional Framework
Source: Ugandan Electricity Regulatory Agency

8. Energy Sector Policy
• Uganda currently has one of the lowest per
capita electricity consumption (70 kWh/year) in
the world.
• The end user tariff was USD 0.18/kWh for
domestic consumers and the difference
between the cost effective tariff and the end-
user retail tariffs was met through a
government subsidy.
• The 2002 national energy policy sets the main
policy goal in the energy sector as being: “to
meet the energy needs of the Ugandan
population for social and economic development
in an environmentally sustainable manner."
Energy Consumption in Uganda
71%
14% 4%
10%
4%
Domestic Use
Commerce
Transportation
Industry
Other Purposes

9. Energy Sector Funding
Sources: UNIDO and ISCHP Paper (2013). World Small Hydro-Power Development Report
International Energy Agency (2011).World Energy Outlook 2011.
Uganda Ministry of Energy and Mineral Resources (2002).The Energy Policy for Uganda.
• The Government of Uganda, with support of the World Bank, funds the
Energy for Rural Transformation (ERT) Program that aims to increase
access to modern, clean and affordable energy to rural areas.
• There are many multilateral and bilateral donors funding the energy
sector in Uganda. These multilateral institutions include: the World Bank,
IFC, and the ADB which are investing in geothermal and hydropower
generation.
• Bilateral donors include KfW, the Netherlands, the United States, and
the United Kingdom which are in investing in small hydro-power plants.
• OFID has invested in Uganda’s energy sector through the funding of
rural electrification projects. Other members of the Arab Coordination
Group that have also contributed to Uganda’s energy sector include
BADEA and Kuwait Fund.

10. Developmental Funding Constraints
Electric power shortage remains the single greatest obstacle to the
country's economic growth; although, access to electricity is one of
the key tools to national development.
In order to evolve relevant policies and enhance investment in the
energy sector, the following have been identified as the key issues
that affect the supply and consumption/demand for energy in the
country:
• Financing was identified as the most significant constraint for the
development of energy sector projects.
• Inadequate public sector financing and private sector partnership
to develop electricity supply projects to match the growing demand
for the service.

11. Proposed Responses to Energy Sector Issues
In order to address these challenges and in full recognition of the
strategic role that electricity plays in socio-economic development,
the following power sector reforms with the following key objectives
are proposed:
• Make the power sector financially viable.
• Increase the sector's efficiency.
• Improve the sector's commercial performance.
• Attract private capital and entrepreneurs.
• Take advantage of energy financing opportunities from DFIs.
• Ensure energy tariffs are set through only sound economic
principles and not through politics.

12. Conclusions
Uganda faces the challenge of accelerating access from its current average of
60,000 new connections a year, to a pace that will ensure universal access by
2030.
The average yearly growth of the total energy demand is 4%, incorporating a
population growth rate of 3.1% and adjusting these values for the new power
plants under construction based on government measures afore-mentioned,
show that electricity consumption would grow at a rate of 9% by the year 2020
which is rather high.
Thus, energy development should be prioritized as a high level issue for Uganda
with a considerable investment from bilaterals, multilaterals and the private
sector to be channeled towards the development of an adequate energy
infrastructure for Uganda.
The provision of adequate and reliable power supply can mainly be achieved by
the development of large hydro and several renewable energy projects. There is
also a need to invest in both the exploration and development of new energy
sources and technologies to meet the future demand.