Uganda expects to add 600 MW to its Installed Generation Capacity with the commissioning of the Nwoya-based Karuma Hydropower Plant in March 2023, Energy Ministry Ruth Nankabirwa has announced.
Announcing the 2023 electricity end user tariffs in Kampala, Nankabirwa said the addition of Karuma Hydropower Plant would enhance Uganda’s power generation capacity and also strengthen and improve the stability of the Power Supply Grid.
“Karuma Hydropower Plant is among the plants with the lowest tariff as compared to the rest of the generation plants in the country. If fully dispatched, the plant will reduce the overall weighted average cost of generation, which will lead to a reduction in the end-user tariffs,” Minister Nankabirwa told journalists during an engagement held at Uganda Media Center on Friday, December 30.
“This effort to reduce the end-user tariff remains a key aspiration of the Country as an enabler of industrialization for social and economic transformation,” she added.
The 600 MW Karuma Hydropower Plant, would see the West Nile region get connected to the Transmission Grid for the first time by March 2023.
The dam, which was built by Sino-hydro Corporation, and whose commissioning has been extended more than thrice, is planned for launch on March 2023. The Minister didn’t name the exact new date.
The delayed launching of the power dam had previously triggered friction between the builders and government that is paying 15 per cent of the $1.7 billion (Shs6 trillion) with the rest of the cash coming from Exim Bank through a soft loan from the Chinese government.
The first completion date was set for December 31, 2019, but was extended to November 30, 2020. The November date was pushed to June 22, 2022.
Over the years, The Uganda Electricity Generation Company (UEGCL) has blamed the persistent delays to commission Karuma dam on procurement hurdles, delays by government to hand over land for the project, and hostile weather, including torrential rain, which slowed down some of the construction works.
Recently, UEGCL attributed the new delays to discrepancies in electromechanical installations such as electric cables, wiring system in the tunnels and the fire extinguishing system which now they say are now being fixed.
Once commissioned, Karuma is expected to feed into the 2023 Uganda’s target of having 1,300 MW installed capacity of electricity.
But the construction of the power dam has been far from smooth, with President Museveni ordering then Energy minister Irene Muloni to suspend three top government engineers to pave way for an investigation into shoddy work in the construction of Karuma and Isimba dams.
There were also reported cracks on the dam’s spillway walls, but this has reportedly been rectified.
Nankabirwa also announced that the government with support from the World Bank will also implement the Energy Access Scale-up Project (EASP) project to support over 1,360,000 households, industrial Parks, SMEs and refugees and host communities to get connected to electricity under the Electricity Connection Policy (ECP).
Meanwhile, government has also set electricity tariffs for the first quarter of 2023 beginning January to March.
The new tariffs, announced by the Chairperson of the Electricity Regulatory Authority-ERA, Dr, Sarah Kanaabi Wasagali, show that domestic users shall pay 250 Shillings for the first 15 units purchased in a month known as a lifeline and 808.9 Shillings for units above the lifeline.
This means there is no reduction in the lifeline tariff but a 1.5 percent reduction in the above lifeline units. Dr. Wasagali also announced that the commercial tariffs shall be reduced from 624.6 Shillings in the current last quarter of 2022 to 637.7 Shillings in the coming first quarter of 2023.
Electricity tariffs for street lights have been maintained at 370 Shillings.
Dr. Wasagali says that the tariffs have been set based on different factors such as the appreciation of the Uganda Shillings against the dollar from 3810.74 at the time tariffs for the current fourth quarter of 2022 were determined to 3738.33 by 30th November 2022. She also says that they expect Electricity demand to grow at an annual rate of approximately 8.3 percent in 2023.
Dr. Wasagali also says that the government shall maintain the domestic cooking tariff which is domestic electricity consumption between 81 to 150 units per month. Under the cooking tariff, domestic consumers who use between 81 to 150 consecutively for three months are charged under the lifeline tariff instead of the above lifeline. This is intended to motivate people to use electricity for cooking instead of other forms of energy such as charcoal or firewood.
In a bid to increase the usage of electricity in the country, the government shall also implement the hybrid customer connection framework where the cost of a pole connection has been reduced from 720,883 shillings to 470,000 shillings.
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