European Union boosts Uganda’s renewable energy with UGX 18.5 billion

Lennart Deridder, Acting Head of Cooperation – EU Delegation, speaking at the launch (PHOTO/Courtesy).

Lennart Deridder, Acting Head of Cooperation – EU Delegation, speaking at the launch (PHOTO/Courtesy).

KAMPALA – EDFI ElectriFI, the Electrification Financing Initiative funded by the European Union – EU, committed circa EUR 5 million (Ugx 18.5billion) to bring electricity to underserved communities in Uganda.

In December 2020, the EU and EDFI ElectriFI agreed on establishing a dedicated ElectriFI Country Window for Uganda, with a specific funding package of EUR 5 million, to be invested in renewable energy companies active in Uganda.

The launch of the Uganda Country Window will enable the country’s capacity to usher in its electricity-generating potential and step up its efforts to mobilise renewable energy resources while tapping into private-sector funding.

Lennart Deridder, Acting Head of Cooperation – EU Delegation, speaking at the launch of the ElectriFI facility said that Uganda is richly endowed with renewable energy resources.

He noted that the total estimated potential is about 5,300 MW of electricity generating capacity which is equivalent to 5 nuclear power plants but the resources, however, remain largely unexploited.

“Hydropower and biomass are considered to have the largest potential for electricity generation. But also solar power receives increasing attention by investors. Moreover, located in the East African Rift Valley, Uganda has promising potential for the exploit geothermal energy.”

“Emerging economies – such as the Ugandan – need this transition in order to not only to halt CO2 emissions in the context of the fight against Climate Change. It is first and foremost needed to tackle the loss of forests, biodiversity and soil fertility due to the massive use of charcoal. Using charcoal generates productivity loss, and additional fatalities due to respiratory disease and increases the disastrous effects of Climate Change through floods and landslides. Women and children die prematurely because respiratory diseases linked to use of petrol and charcoal to light and cook,” added Deridder.

According to him, the data of the Africa Energy Outlook 2022 of the International Energy Agency indicate that the total number of people without access to electricity has increased by 4% reversing the trend of people gaining access. He says COVID is probably one of main triggers of this evolution and Uganda is one of the countries that is contributing to this trend.

Mr. Deridder noted that the EU Global Gateway launched last year is a new European strategy to boost smart, clean and secure links in digital, energy and transport sectors and to strengthen health, education and research systems across the world.

“The EU is stepping up its offer to its partners such as Uganda with major investments in infrastructure development around the world and in Uganda in particular.”

He revealed that in the last 5 years, they have implemented a programme to support the energy sector worth more than 100 million EUR that – in a Team Europe Approach together with its Member States has leveraged an additional 1billion EUR.

“This covers the promotion of Independent Power Producers resulting in the installation of an additional 158 MW, a programme dedicated to Rural Electricity Connections, the construction of transmissions lines (Masaka-Mbarara, Mbale-Bumbi), Mini-grids in Northern and Western Uganda, and the Achwa hydropower plant (42MW).”

He noted that the EU will continue to support the electrification efforts of Uganda by mobilizing an additional envelope of 40 million Euro to support a new last mile connection to the electricity grid, the promotion of clean cooking, improved water management on the Nile or rehabilitation of the Nalubaale hydropower plant.

This support will contribute to Uganda’s efforts to unlock significant economic, social and environmental development opportunities and to tackle various challenges such as loss of forests, biodiversity and soil fertility due to the massive use of charcoal.

ElectriFi is an impact fund bridging the financial gap in terms of equity, quasi-equity and debt to private companies investing in rural electrification, commercial and industrial captive power, productive use of energy, e-mobility and independent power producers, amongst others. Established in partnership with European Union Delegations and host governments, ElectriFI Country Windows offer dedicated funding for selected countries, in line with national objectives.

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