Ministry of Energy gets Shs 136bn grant for solar mini grids

The ministry of Energy and Mineral Development has received a Shs 136bn grant from the German government and European Union to support the electrification of Uganda’s rural areas with solar energy, and contribute towards the transition to clean renewable energy through an initiative dubbed Get Access mini grid solar programme.

The initiative will provide first time access to modern, affordable and clean electricity to more than 110, 000 people, 800 public institutions, mainly schools and health centres, and at least 700 businesses in rural areas through solar-powered mini grids.

These will approximately add five to six megawatts of generation capacity to the country. With a contribution of the German Federal ministry for Economic Cooperation (BMZ) of Euro 15m and the European Union contributing Euros 10m, the total project cost will be Euro 35m (Shs 136.2bn). Both the government of Uganda and the private investors will contribute to cover the remaining Euro 10m.

The German Development Bank (KfW) will manage the funds. The ministry of Energy will be responsible for the programme implementation in collaboration with the Electricity Regulatory Authority (ERA).

During the signing of the implementation agreement for the initiative in Kampala, Caroline Adriaensen, the head of cooperation for the EU delegation to Uganda, said the project will contribute to national socio-economic development by stimulating economic activities in the cluster areas by promoting the creation of more business ventures.

She added: “Moreover, Get Access will also create a market for private sector driven and financed mini-grid electrification as a viable and ready alternative to publicly-financed grid electrification in remote locations as well as improve clean energy access in rural areas of Uganda and support Uganda in the green transition.”

Meanwhile, Irene Batebe, the permanent secretary of the ministry of energy revealed that government is finalizing the preparatory activities for the Electricity Access Scale Up project, which targets to achieve up to 1,073,500 connections with the approval of cabinet and parliament already obtained. The project considers connecting about 150,000 consumers on mini-grids.

“Building on pro mini-grids project being implemented by GIZ with financing from EU, the Get Access mini grid project is going to complement the above interventions to increase electricity access.”

She noted that the project targets to provide subsidies to private sector developers for the construction, maintenance and operation of mini grids, as well as subsidies for selected Productive Use of Energy (PUE) appliances.

The subsidies will leverage private investments in mini-grids and facilitate more affordable end user tariffs through subsidies to capital costs of solar photovoltaic generation equipment, distribution grid installations, consumer connections and facilitate the promotion of PUE.

“Considering the vast amount of construction materials, equipment and services required for the implementation of this project, I call upon the private sector to position themselves to benefit from the various opportunities that the implementation of this project shall present,” she added.

Over the past years, several projects in the sector have often been constrained by challenges like slow land acquisition but Batebe said that considerations have been undertaken during the preparation of this project to ensure that such challenges are addressed.

“Under this project, the land will be acquired by the private developers and government will only support and facilitate the process. I am optimistic this will accelerate the project implementation.”

The project-supported mini-grids will be grouped in five clusters across Uganda. The village clusters of Palorinya–Maaji (West Nile refugee settlement), Kalangala and Wakiso (Central Uganda), Buvuma Island (East & West) and Lake Albert Shores have been confirmed for off-grid electrification through the programme.

The tender process will begin in 2023 and the construction of the mini grids will start by 2024.

jjingoernest1@gmail.com