The 8MW thermal power plant is a project of Electro-Maxx. The plant has been bashed for failing on its contractual obligations (PHOTO /Courtesy)
The Auditor General is conducting an audit of the heavy fuel Electromax power plant in Tororo District for possible acquisition by the government, the Daily Monitor has reported.
The thermal power plant is owned and operated by independent power producer Electro-Maxx Limited, which is part of businessman Patrick Bitature’s Simba Group business portfolio.
The 50MW plant started operations in 2012 under the build own and operate model at a time when the country was grappling with low hydro electricity generation amid surging demand.
The Tororo-based plant, and Jacobsen Elktro thermal plant in Namanve complemented the small hydro generation from Nalubaale and Kira dams, but with government paying millions of dollars in power subsidies to keep tariffs lower for end users.
Daily Monitor’s Fred Musis quoting industry sources wrote that Mr Bitature, who early this year was teetering on the edges of financial implosion and was embroiled in court battles with a South African lender for repayment of a $30m loan, had sought a bail out from government but was unsuccessful.
However, in a meeting with President Museveni he floated the idea of government acquiring the plant, which he argued had invested in to complement the low power generation more than a decade ago.
The President, sources quoted by the Monitor directed the ministries of Energy and Finance to further discussions with the former to thrash out the finer details of the deal.
Mr Bitature said last week it was premature to talk about the matter.
However, officials in the ministries of Energy and Finance maintained that discussions are ongoing.
The Ministry of Energy Permanent Secretary, Irene Bateebe confirmed the ongoing audit as part of the due diligence process.
“It is the Auditor General’s findings that will inform and determine the next step including the price,” she said.
The plant once acquired will be added to the Uganda Electricity Generation Company Limited (UEGCL) stable.
UEGCL early this year took over the Namanve thermal power plant, previously operated by Jacobsen Elktro after its 13-year build, operate and transfer contract expired.
Government, through Uganda Electricity Transmission Company Limited (UETCL) has a running power purchase agreement (PPA) with Electromax, even though the latter scarcely supplies electricity to the national grid due to surplus from hydro generation.
Uganda has a combined generation capacity of 1,365.7 MW from all sources against average peak demand of 800 MW. The generation capacity is expected to increase to 2,000 MW once beleaguered Karuma is commissioned later next year.
In 2019 UETCL amended Eletromax’s PPA to operate in Arua District where it ventured in to generate 8.2 MW to electrify West Nile.
However, the cash-strapped company has over the months come under the spot for failing to the deliver on the job.
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