Uganda’s 2026/27 national budget allocates Shs2.07 trillion to energy development — money earmarked for the 380-megawatt Kiba hydropower plant, a floating solar facility at Isimba, 500 megawatts of utility-scale solar across the Elgon and Acholi regions, early preparatory work for nuclear power at Buyende, and, critically, the expansion of transmission lines and substations. That last item deserves far more attention than it typically gets.
Uganda’s industrialisation agenda — anchored in the government’s ATMS framework of agro-industrialisation, tourism, mineral development, and science and technology — depends on power reaching industrial parks, agro-processing zones and manufacturing clusters reliably and at scale. Generation capacity has long dominated the public conversation: new hydropower dams and solar farms make for good ribbon-cutting photos. But a solar plant that cannot connect to the grid, or whose power cannot reach the industrial zone that needs it, is a stranded asset, not a development win.
That mismatch is already visible in parts of Uganda where solar potential is highest but transmission infrastructure is thinnest. Industrial zones sited far from existing lines routinely wait years for power to arrive, discouraging the very investment the government is trying to attract. The 2026/27 budget’s decision to fund transmission and substation expansion alongside new solar capacity, rather than generation alone, is the right call — the test will be whether the money translates into steel and copper on the ground within the financial year, not just into another line item.
Substations are the unglamorous half of this story, but they are where solar’s biggest technical liability gets managed. Unlike hydropower, solar output swings with cloud cover and time of day. Modern substations serving industrial loads need the capacity to handle two-way power flows, absorb fluctuations, and increasingly to pair with battery storage so industrial users aren’t left scrambling when the sun dips behind a cloud. Underinvesting here doesn’t just risk blackouts — it risks the kind of voltage instability that damages industrial machinery and drives manufacturers straight back to diesel generators.
None of this comes cheap or fast. Transmission lines and substations require heavy upfront capital, multi-year construction and approval timelines, and land acquisition processes that have a history of dragging on amid compensation disputes and environmental review. Uganda’s broader budget picture compounds the pressure: debt servicing alone will consume roughly Shs33.4 trillion of the Shs84.3 trillion national budget this year, nearly 40 percent of total spending, leaving less fiscal room than the energy sector’s ambitions would ideally command.
That is precisely why public funding alone shouldn’t be expected to carry this. Public-private partnerships — which the government has already flagged for power transmission and other infrastructure — offer a route to mobilise private capital and technical expertise without further straining an already debt-burdened budget. Concessional financing from development partners can do the same. And smart-grid technology, including digital monitoring and battery storage, is becoming cheap enough that Uganda doesn’t need to choose between modern grid management and fiscal restraint.
Uganda’s growth strategy is betting heavily on industrialisation to lift the country toward double-digit growth. That bet only pays off if power actually reaches the factories, processing plants and industrial parks the strategy depends on. The 2026/27 budget has, for once, named transmission and substation expansion as a priority alongside generation. The next test is execution — and Uganda’s industrial future will be decided as much in substations and transmission corridors as in solar farms.
The writer, Lydia Biira, is the finance and admin manager at the Centre for Citizens Conserving Environment & Management (CECIC)
