Uganda Global Energy Transfer Feed-in Tariffs (GET FiT) project Launched

Uganda and development partners have agreed to fast track the construction of small renewable energy project in the next three to five years to delay the imminent return of load-shedding.

The Global Energy Transfer Feed-in Tariffs (GET FiT) will support a portfolio of up to 15 private sector-led projects with a total installed capacity of about 125 megawatts (MW).

GET FiT programme for Uganda consists of a premium payment mechanism, a guarantee facility to secure against off taker and political risks, as well as a private financing mechanism that will offer debt and equity at competitive rates.

The private investment facilitator programme is jointly developed by Uganda, the Germany development agency KfW, Electricity Regulatory Authority (ERA), and Deutsche Bank Group. The programme is supported by Norway, UK's DFID, Germany, The European Union and the World Bank.

At the launch of the programme over the weekend at the Kampala Serena Hotel, the state minister of energy and mineral development, Peter Lokeris, said the Government has already developed standardised power purchase and support agreements.

"I call upon project developers to make use of the developed standardised agreements to fast track implementation," he said. "There will be a little, if any, charge to standardised agreements to accommodate different requirements."

The minister also advised that interconnection requirements for projects beyond five kilometers from the national grids should be brought to the attention of the Government early enough to avoid later interconnection delays.

Dirk Niebel, the German Federal minister for economic cooperation and development, said Uganda needs investment close to 7b euros to meet energy supply deficit for the next 30 years.

"There is a need for private capital," he noted.

Niebel said the implementation of the GET FiT programme in Uganda should help improve the overall enabling environment for private investment in renewable energy through improvements in the Renewable Energy Feed-In Tariff system and its application.

Thorbjorn Gaudstadsaether, the Norwegian ambassador to Uganda, said investor confidence and cost reflective tariffs would help Uganda meet its "ambitious" energy targets.

He said the programme will help stabilise power sector finances by adding least-cost generation capacity, enable the Government to pursue its electrification targets, improve the availability of long-term commercial finance for small-scale renewable energy generation projects in Uganda and help decentralise and diversify Uganda's energy mix, which will enhance security of supply.

Daniel Graymore, the director of UK's DFID Uganda, called for good governance and elimination of corruption if Uganda is to reduce poverty and move up the growth path.

"Attracting investments that will create jobs needs tackling corruption," he said.

Uganda has requested the World Bank to explore the use of a partial risk guarantee mechanism for small hydropower projects, which would be used to facilitate the provision of short term liquidity support.

"We expect the World Bank to conclude appraisals for the required partial risk guarantee to conclude the GET FiT package and also facilitate implementation of other projects in Uganda," Lokeris appealed.

The GET FiT programme also supports 'the Sustainable Energy for All' initiative under which Uganda was selected as one of the fast movers.

By Ibrahim Kasita,
The New Vision Newspaper
3 June 2013