INTERGRATION OF ENERGY ACCESS IN RURAL DEVELOPMENT IN UGANDA

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INTERGRATION OF ENERGY ACCESS IN RURAL
DEVELOPMENT IN UGANDA

• Benon Bena and James Baanabe
• Ministry of Energy and Mineral Development
• Uganda
• EU Energy Initiative Workshop and Policy Dialogue
• Hotel VIP, Maputo, Mozambique
• 12-15 April 2005

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CONTENT OF THE PRESENTATION

• Background
• Policies on Energy and Poverty
• Energy for Rural Transformation Programme
• Selected Case Studies
• Igloo fish processing plant situated near Majanji
  Landing Site on lake Victoria in Busia District.
• Njeru Kayunga Bbale Rural Electrification
  Project
• Fish processing Plant at Bukakata
• Ssembabule Rural Electrification Scheme
• Kaweri Coffee Plantation Limited
• Solar Electrified Areas
• Conclusion

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BACKGROUND

• Uganda has a population of 26 million, 87 rural,
  in scattered nature.
• Uganda has consistently registered high economic
  performance over the last decade 
• Growth rate averaging 6
• Annual increase in per capita income of 3.7
• Reduction in people living below poverty line
  56 in 1992 to 38 in 2004
•  BUT
• Poverty remains wide spread in rural areas
• Per capita income 320
• Inadequate infrastructure services
• Lack of integration with markets

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Energy Situation In Uganda

• Biomass represents 93 of the national energy
  balance
• lowest per capita consumption of commercial
  energy in Africa
• energy demand growing
• oil products imported (100)
• renewable energies are abundant but not largely
  disseminated
• electricity load shedding and low electrification
  rate 9 constrain the economic and social
  development

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• Electricity Access
• Access at national level only 9
• Rural access to national grid only 3
• Self electrification (gen-sets, PV, car
  batteries) about 1

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POLICIES ON ENERGY AND POVERTY

• Energy Policy
• Poverty Eradication Action Plan (PEAP)
• Power Sector Strategic Plan 1997, 1999
• Rural Electrification Strategy and Plan 2001

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The Energy Policy for Uganda

• GOAL
• To meet the energy needs of Ugandas population
  for social and economic development in an
  environmentally sustainable manner
• OBJECTIVES
• To establish the availability, potential and
  demand of the various energy resources in the
  country
• To increase access to modern affordable and
  reliable energy services as a contribution to
  poverty eradication (Pillar 1, 2 ,5 of the PEAP)
• To improve energy governance and administration
• To stimulate economic development
• To manage energy-related environmental impacts

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Poverty Eradication Action Plan

• Five Pillars in the PEAP
• Economic management
• Production, competitiveness and incomes
• Security, conflict-resolution and
  disaster-management
• Governance
• Human Development

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Power Sector Strategic Plan (1997,1999)

• It spelt-out a new policy direction in the power
  sector and emphasized
• Need to make power sector financially viable.
• Involvement private sector in electricity.
• Increase of access to electricity.

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Electricity Act, 1999

• Broke the monopoly of power utility-UEB
• Created a Regulator (ERA).
• made RE an obligation
• Establishment of Rural Electrification Fund (REF)
• Minister had to develop strategy plan
• Special incentives for investments in RE

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The Rural Electrification Strategy and Plan

• It spelt out the mechanism of Rural
  Electrification and the targets
• Institutional framework for the Rural
  Electrification Fund.
• Increase of rural electrification from 1 to 10
  by 2012.
• Combination of delivery modes grid extension,
  off-grid systems, solar PVs and renewable energy
  projects.

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The Rural Electrification Fund

• Channel for extending smart subsidies.
• Main sources of funding
• Government budget
• 5 levy from transmission bulk purchases from
  generation companies
• Grants from bilateral and multilateral donors
• Criteria for access based on
• Financial and economic soundness of project
• Sound environmental impact statement
• Positive social return
• Equitable electricity distribution

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ENERGY FOR RURAL TRANSFORMATION PROGRAMME (ERT)

• It is a ten year programme developed by GOU with
  support from World Bank/GEF.
• It is private sector led.
• Projects benefit from subsidies to buy down
  capital costs.
• The overall goal is to increase electricity
  access in rural areas from 1 to 10 by 2012.

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• It addresses several delivery mechanisms
• Grid extension where feasible
• Decentralized mini grids
• Solar PVs and
• Development of other renewable energy resources.

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OPERATIONAL FRAMEWORK OF ERT

• ERT has strong linkage with key production and
  human resource sectors Agriculture, Health,
  Telecommunication, Water and Education.
• Target areas are District Headquarters, Trading
  Centers, Agro Processing areas, Schools, Health
  Centers and Rural Water supply units.
• Service delivery mechanism and Project
  Developers Private Sector, NGOs, Local
  Communities and local governments.    

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Lessons Learnt on ERT

• Private sector is reluctant to invest in RE
  projects. It perceive it as a high risk business-
  the thinking is have public leading is required
• Time it takes for private sector from project
  initiation to implementation is long
• Need to have subsides such as GEF financing to
  buy down capital cost which lowers the tariff.
• Unlike GEF, PCF does not considerably lower the
  tariff.
• Programmes being developed should address the
  problem of affordability and the high upfront
  costs.

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Lessons Learnt on ERT Contd

• Linkages with other social and economic sectors
  in developing RETs is a big stimuli of
  development
• Need to employ a mix of service delivery methods
• Grid extension where feasible
• Decentralized mini grids
• Solar PVs and
• Development of other renewable energy resources.

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SELECTED CASE STUDIES OF ENERGY INTERGRATION IN
RURAL DEV

• Igloo fish processing plant in Majanji - Busia
  District.
• SMEs on Njeru Kayunga Bbale Rural
  Electrification Scheme
• Fish Processing Plant at Bukakata (Using a diesel
  generator)
• Ssembabule Rural Electrification Scheme
• Kaweri Coffee Plantation Limited in Mubende
  District

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FISH PROCESSING PLANT IGLOO FOOD INDUSTRIES

• This is a fish factory situated near Majanji
  Landing Site on lake Victoria in Busia District.
• Provision of electricity to the site involved
  construction of a 10 km 33 kV line (three phase)
• Production Capacity 40 tonnes of
  fish/day
• Number of people employed 400

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Majanji landing Site

• Fresh fish for the factory is received at this
  landing site
• Beneficiaries include about 74 fishermen

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Ice Plant at Igloo Food Industries

• The company uses electricity to produce ice, to
  chill the fish and for refrigeration of the cold
  rooms.
• Ice Production 60 tonnes/day.
• The ice produced is used by fishermen to preserve
  the fish immediately it is caught.

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Loading Fish for Export

• Fish exports brings in foreign currency into the
  economy.

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SMES ON NJERU KAYUNGA - BBALE RURAL
ELECTRIFICATION PROJECT

• The project completed in July 2000 included
  construction of a 92 km 33 kV line from Njeru to
  Bbale and provision of distribution transformers
• Major load centers on the project include,
• A stone quarry belonging to Nile Mining Company.
• 13 maize mills
• Five coffee factories
• Two milk cooling plants
• Three secondary schools and six primary schools
• A health unit

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Coffee Processing Unit

• A small coffee processing unit connected to the
  grid.
• There are four other coffee mills connected to
  the grid.

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Maize Mill Kayunga Bugerere Road

• There are 13 such maize mills on the line

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Bugerere Balunzi Diary Cooling Plant

• It belongs to a Cooperative society located in
  Baale.
• Capacity is 5000 litres a day.
• Serves about 120 farmers.
• Before the cooling plant was installed, the milk
  was taken to Kayunga town 44KM away.
• This greatly improved the milk quality reducing
  loses.

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Bugerere modern farm cooling plant

• Situated between Kayunga-Bbale.
• It serves 20 farmers
• It handles 1800 litres of milk per day

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Bbale Health Centre

• Main energy source used before electrification
  was kerosene and charcoal
• The hospital is connected to the grid now
• Electricity is used for
• Lighting
• Sterilisation of hospital equipment medical
  supplies
• Refrigeration of vaccines
• Powering equipment for limited operation

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Kanjuki S.S.S

• This is one of the secondary schools connected to
  the grid.
• Electricity is used for lighting the class
  rooms which has made reading at night possible.
• Lighting in dometries - which has improved
  quality of life of the students
• School in take has increased to 800 students half
  of them reside at the school.

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FISH PROCESSING PLANT AT BUKAKATA, MASAKA

• It belongs to Fresh water fish exporters Ltd
• The factory currently uses a 265 kV diesel
  generator.
• It employs 250 people
• Factory capacity is 50 tonnes/day, however due to
  limited power, current production is 10
  tonnes/day.

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Bukakata landing site

• The site is on Lake Victoria in Masaka District
• Fresh fish is harvested here
• It serves 20 fishermen.

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Ice making plant-Bukakata Contd

• The ice produced is used by fishermen to preserve
  the fish immediately it is caught

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Company Fuel Service Station-Bukakata Contd

• Fuel consumption by the plant is about 600 litres
  per day.

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Proposed Scheme for Extending Grid Power to
Bukakata

• Proposed scheme will involve construction of a 35
  km 33 kV line from Masaka to Bukakata
• Project cost has been estimated at Ug. Shs 1.5
  billion.
• From Bukakata the line would be extended to
  Kalangala Island (If funds are available)

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RURAL ELECTRIFICATION SCHEME IN SEMBABULE

• This involved construction of a 17 km power line
  from Matete to Ssembabule town and provision of
  distribution transformers.
• Electricity is used for communication, car
  battery charging and in small enterprises in the
  town

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Coffee Processing Plant in Ssemabule

• Processes 150 bags per day
• It serves about 100 farmers

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Maize mill in Ssemabule

• One maize mill is in operation in the town.
• Previously the maize was grinded at a mill 10km
  away from Ssemabule

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KAWERI COFFEE PLANTATION LIMITED

• Government is providing 23 km of 33 kV line to
  the plantation.
• 18 km has so far been constructed and
  commissioned
• Total project cost is US 10M.
• When completed, the company will employ about
  6000 people.

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Wet Coffee Processing Plant Kaweri Plantations
Ltd

• The wet processing plant has a capacity of 500
  kg/hour. This is for carrying out trials.

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100 kVA Transformer

• A 100 kVA transformer serving the wet processing
  plant, the residential quarters
• 3 transformers have been installed and powered.
• The remaining 2 transformers and 5 km of the line
  will be provided in the near future.

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Coffee Plantation

• Peak production capacity of the plantations is
  expected to be 4000 tonnes of coffee per year.

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CONCLUSION

• Good policy frame addressing energy is key in
  increasing energy access.
• Rural energy used in enterprises has added value
  to agricultural products, thus improving the
  farmers incomes.
• Rural enterprises resulting from energy access
  have provided employment, hence reducing poverty
  levels.
• Peoples lives have improved through provision of
  energy for social services (health, education and
  water)
• Private public partnership with the public
  leading

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Thank You for Your Attention !!!