1. 1 SYMPOSIUM: U G A N D A A F T E R I D I A M I N A N D M I L T O N O B O T E Hamburg, Germany 29 th September 2008 INVESTMENT OPPORTUNITIES IN POWER GENERATION IN UGANDA PRESENTED BY HON. DAUDI MIGEREKO MINISTER OF ENERGY AND MINERAL DEVELOPMENT, UGANDA

2. 2 Outline of the Presentation Introduction Issues in the Power Sector before 1986 Reforms in the Power Sector Plan for Increasing Power Supply. Opportunities for Investment in the Power Sector. Conclusions.

3. 3 INTRODUCTION Uganda is well endowed with a variety of energy resources which include: –large hydro resources along the Nile, –fossil fuels, –Renewable energy such as small hydros, biomass, solar, wind and geothermal sources. The development of these resources provides investment opportunities in a number of areas in power generation to meet the power demand in the Region.

4. 4 ISSUES IN THE POWER SECTOR BEFORE 1986 One Power station in the country - the Owen Falls Power station commissioned in 1954. Total installed capacity - 150 MW. Inadequate investment in the sector. Slow growth in the economy. Low power demand and very poor supply reliability.

5. 5 REFORMS IN THE POWER SECTOR To address the issues above, the NRM Government introduced reforms in the sector with a view to: improving the efficiency of the then utility company, Uganda Electricity Board; introducing a power sector regulatory framework in order to protect both the interests of power consumers and the investors; liberalizing the sector and commercializing and privatizing generation and distribution businesses; enabling the private sector to enter the power sector.

6. 6 Impact of the Reforms A number of players from the private sector have been attracted into the energy sector which has increased power generation. Private players have acquired concessions for existing generation plants and in the distribution network. A number of private firms are investing in new ventures.

7. 7 I nstalled Capacity Available for Power Generation The installed capacity for power generation is as follows: Kiira & Nalubaale Power stations at Jinja 380 MW Thermal Power Stations by Aggreko 100 MW Thermal Power station by Jacobsen 50 MW Cogeneration by Sugar Plants 25 MW Mini Hydros 17 MW

8. 8 PLAN FOR INCREASED POWER SUPPLY Government has put in place a short, medium and long term plan to ensure supply meets demand at any time in the future from 2010 onwards. The plan involves: increasing generation capacity using fossil fuels, construction of two large hydropower plants within the next 4 years, enhancement of renewable energy development, emplacement of energy efficiency measures, and development of other large hydros.

9. 9 The Energy Fund To facilitate the smooth implementation of the strategic plan, an Energy Fund was established to enable government to speed up investments in hydro power projects and the associated infrastructure.

10. 10 Hydropower Projects for Development Bujagali (250MW) being constructed; Karuma (200MW) is planned for 2009, Isimba (100MW) in 2009; Ayago North (300MW) and Ayago South (250MW) in the medium term. Other sites are Murchison Falls (600MW).

11. 11 Sites for Hydropower Development

12. 12 Opportunities for investment in Hydropower Participation in the Public Private Partnership (PPP). Contribution to equity. Participation in the Engineering, Procurement, and Construction (EPC) Contract. Supply of Equipment required in the project.

13. 13 Investment Opportunities in Renewable Energy. 37 small hydropower sites so far identified with an estimated power potential of 164MW. So far 54MW has been committed for development by investors. Co-generation capacity is being expanded of which 12MW is now being fed into the national Grid. Joint partnerships with the five sugar factories can enable higher level generation capacities. Dissemination of Solar Photovoltaic Systems in rural areas not connected to the main grid.

14. 14 High Voltage Transmission Projects Planned Transmission Network: In order to cater for plans to achieve national coverage, plans are underway to build new transmission lines in the next 10 years totalling 1,000km of 132KV, 500km of 220KV and 264 of 400KV. Regional Projects under the East African Power Master plan: Uganda-Kenya (220kV, 230km), Uganda-Tanzania ((220kV, 510km); and Uganda-Rwanda (132kV, 230km).

15. 15 Opportunities for Investment in Transmission Supply of equipment such as transformers and high voltage cables. Construction of towers, transmission lines and Substations.

16. 16 Financing of Power Projects: The development of these projects requires substantial financing. This therefore provides opportunities for Investment Banks to provide financing instruments to potential developers.

17. 17CONCLUSION Investment in the energy sector is priority number one for the Government of Uganda. The Energy Sector in Uganda is expanding very fast with a legal and institutional framework for carrying out business offering tremendous opportunities.

18. 18 CONCLUSION The opportunities include:- –Participating in the construction of Hydroelectric Power Plants. –Participation in the construction of small renewable energy projects. –Construction and development of the transmission network. –Sponsoring and financing of energy projects at attractive rates of return. The above, combined with the accountable leadership, which we have, will ensure sound returns for investors and benefit the entire population of Uganda.