Manufacturers to bypass Umeme to access cheap electricity

Kampala, Uganda | THE INDEPENDENT | Big industrial electricity consumers could soon buy electricity directly from generators or the transmission company to lower the electricity tariffs, according to the Minister for Energy and Mineral Development, Ruth Nankabirwa.

Nankabirwa, who spoke during the launch of Electricity Regulatory Authority House in Kampala on Sep.30 said the energy ministry is currently spearheading the amendment of the Electricity Act 1999 with the intention to lower the end user tariffs for manufacturers.

“The government is undertaking a number of structural reforms in the sector aimed at improving efficiencies and reducing costs,” she said.

The manufacturers have for years complained to President Yoweri Museveni about the high electricity costs arguing that it has made them uncompetitive in the East African region and beyond.

In response, President Museveni has promised that the government will sale electricity directly to the manufacturers and not through the concessionaire company, Umeme, once the new dams are commissioned.

Isimba hydropower dam was commissioned in 2019 while Karuma hydropower dam is expected to be commissioned in June 2022.

Nankabirwa revealed that the government is implementing a number of projects including the Electricity Connections Policy (2018-2027) whose goal is to achieve 60% electricity access to grid electricity in the country by 2027.

So far, more than 270,000 customers have been connected to the electricity grid and more than 220,000 awaits government funded connection.

Under this arrangement, the government meets the cost of electricity connection materials while potential consumers undertake the wiring of their premises using certified wire persons thereby enabling the citizens who are ready for electricity consumption to access free connection services.

Currently, the annual budget required to implement ECP is estimated to be Shs200bn. Nankabirwa said the electricity tariff for both Karuma and Isimba will be less than US$5 cents per kWh during the loan repayment period and US$1.2 cents upon completion of the loan repayment period.

ERA CEO Ziria Tibalwa Waako said the seven-floor building comprises of among others; the basement with 47 parking slots, water storage tank and power house, boardrooms, offices, a 133 seater conference hall and cafeteria.

The building was also designed as a smart-green building fitted with Building Management System to monitor all key systems including the lift, access control, energy usage and light management, two standby generators and the solar power system.

“The project will be able to comfortably sit all ERA staff and enable the Authority to effectively undertake its mandate,” Tibalwa said.

“There’s also an anticipated reduction in hotel conference costs because the building is fitted with several meeting rooms and board rooms.”

Tibalwa added that while the building was designed to cost Shs34.37bn, real costs stood at Shs26.7bn, making a saving of Shs7.6bn.

Roko Construction Company Ltd was the project contractor, with Arch Tech Consults as the ERA’s Project Manager Owners Engineer.