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UGANDA Opportunities and Demand for generation projects and tariffs in Uganda. Eriasi Kiyemba Managing Director/Chief Executive Officer UETCL 1.

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Presentation on theme: "UGANDA Opportunities and Demand for generation projects and tariffs in Uganda. Eriasi Kiyemba Managing Director/Chief Executive Officer UETCL 1."— Presentation transcript:

1 UGANDA Opportunities and Demand for generation projects and tariffs in Uganda. Eriasi Kiyemba Managing Director/Chief Executive Officer UETCL 1

2 Contents Power sector reforms Power sector objectives Current status Generation projects Transmission line projects Tariff Structure in Uganda 2

3 Power Sector Reforms In line with power sector reforms and objectives, the Government of Uganda (GOU) has initiated a number of projects on a private-public-partnership arrangement as a strategy to address power generation requirements in the short and medium term. 3

4 Power sector objectives To make the power sector financially viable To increase sectors efficiency To meet the growing demand for electricity and increase area coverage To improve the reliability and quality of electricity supply To attract private capital through private sector participation To take advantage of export opportunities 4

5 Power sector objectives (cont.) The power sector has undergone reforms with the objective of ensuring adequate availability of affordable power and create a conducive environment for private sector participation in the power sector/economic development of Uganda The Government of Uganda is committed to the development and utilization of all available energy resources and technologies. 5

6 6 CURRENT STATUS Over the last 14 years GoU has implemented a comprehensive power sector reform Enacted a new Electricity Act in June 1999 Established an independent ERA in November 2000 Unbundled the UEB into successor companies in March 2001 Concessioned the generation business to ESKOM(U) Ltd in November 2002 Concessioned the distribution business to UMEME in March 2005 Collaborated with the EAC and NBI on regional power interconnection Established the REA in 2002 Formulated the Renewable Energy Policy in 2007 Launched the National Development Plan – ( ) GoU: Government of Uganda ERA: Electricity Regulatory Authority REA: Rural Electrification Agency NBI: Nile Basin Initiative

7 Uganda Power Sector 7

8 Government policies Government policies National Development Plan NDP Energy Targets i. Increase generation capacity by an additional 3500MW by 2015 including 150MW from mini hydro plants ii. Expand the transmission grid from the current 1300km to 2750km and increase the transmission voltage from 132kV to 220kV and 400kV iii. Increase the consumption per capita from the current 75kWh/capita to 674kWh/capita by 2015 and 3670kWh/Capita in iv. Increase rural electrification coverage to 20% by 2015 v. Reduce total system losses from 40% to 16% by

9 Government policies Government policies Renewable Energy Policy 2007 i. To increase the use of modern renewable energy, from the current 4% to 61% of the total energy consumption by the year Sustainable Energy for all by 2030 i. This is a UN initiative ii. Uganda was chosen as one of the pilot countries 9

10 Facts on demand vs supply Current peak demand : 484MW Installed capacity: 814MW Current firm supply : 501.5MW Large hydro (465MW) Mini hydro (54MW) Bagasse (13.5) Currently zero thermal dispatch is implemented. Demand growth rate : 10% per annum 10

11 Current Generation 11 UETCLS POWER SUPPLIERS CATEGORY/SUPPLIERINSTALLED CAPACITY (MW)DISPATCH AS AT DEC 2012 LARGE HYDROS ESKOM UGANDA LIMITED380MW215MW BUJAGALI/BEL250MW MINI HYDROS MPANGA/EMS18MW11MW BUGOYE/TRONDER13MW7MW KILEMBE MINES5MW2MW KASESE COBALT9.5MW0MW ISHASHA6.5MW3MW KABALEGA9MW0MW CO-GENERATION KAKIRA SUGAR WORKS12MW KINYARA SUGAR WORKS5MW1.5MW THERMAL JACOBSEN UGANDA LIMITED (NAMANVE HFO) 50MW ELECTROMAXX (TORORO HFO)50MW

12 Planned Generation CATEGORY/SUPPLIERPROPOSED CAPACITY (MW) LARGE HYDROS Karuma625 Ayago600 Isimba188 Murchison Falls--- Oriang400 Kiba400 Achwa88 MINI HYDROS Maziba1 Nyagak 33.5 Kikagati18 Waki5 Muzizi26/52 Kyambura8.3

13 Planned Generation CATEGORY/SUPPLIERPROPOSED CAPACITY (MW) MINI HYDROS CONTD Nyamwamba14 Muyembe10 Siti I&II21.5 Lubilia5.4 Rwimi5.5 Nengo Bridge7.5 Nsongezi35 Kakaka5 THERMAL AND SOLAR Invespro50 Albatros50/230 Kabaale peat33 Sesame Taylor33 Geothermal300 Namugoga Solar50 Mputa (Gas)?

14 Bujagali Hydro Power Project Project description Development, construction and maintenance of a 250MW HPS on a Build-own-operate- Transfer (BOOT) basis. Bujagali Energy Ltd. (BEL) the project company supervised the construction of 100km of 220/132kV transmission lines on behalf of UETCL. 14

15 Bujagali Hydro Power Project BEL the IPP sells electricity to UETCL under a 30 year PPA UETCLs payment obligations under the PPA is guaranteed by the GOU through a government guarantee GOU signed an IA with BEL 15

16 Project sponsor The project sponsor is Industrial Promotions Services (Kenya) Ltd. {IPS(K)} and SG Bujagali Holdings Ltd. IPS is the industrial development affiliate of Aga Khan Fund for Economic Development (AKFED), which promotes private sector initiatives and entrepreneurship through equity investment in Africa and Asia. 16

17 Project sponsor BEL is backed by IPS (Kenya) Ltd., and SG Bujagali Holdings Ltd. an affiliate of Sithe Global Power LLC. The project was implemented on a IPP (PPP) arrangement. IPS raised financing on a 20:80 equity to debt ratio from various financiers i.e. IFC, AfDB, EIB, Nederlandse Financierings-Maats-chappij Voor Ontwikkelingslanden NV 17

18 Thermal Power Projects For all thermal power projects, the development, construction and maintenance of project is undertaken by the private sector. The IPPs sell electricity to UETCL the off taker under short to medium term PPAs. Payment terms are on take or pay deals. GoU signs an Implementation Agreements with the IPPs to give waivers on duty on fuel as well as import and re-export duties on the power plants and accessories 18

19 19 Thermal Power Projects YearPlantDeveloper/IPPProject financing MW ADO LugogoAggreko IBOO MW ADO KiiraAggrekoBOO MW HFO Namanve JacobsenBOT MW ADO Mutundwe AggrekoBOO

20 20 Thermal Power Projects YearPlantDeveloper/IPP MW BagasseKakira Sugar WorksBOO MW HFO TororoElectromaxxBOO MW BagasseKinyara Sugar WorksBOO MW HFO TororoElectromaxx IIBOO

21 21 Thermal Power Projects YearPlantDeveloper/IPP MW BagasseKakira Sugar Works II BOO MW Gas & Crude oil Kabaale JacobsenBOT MW BagasseKinyara Sugar Works II BOO MW Kabale PeatKabale Energy LtdBOO

22 Mini hydro power Projects For all mini hydro power projects, the development, construction and maintenance of project is undertaken by the private sector. The IPPs sells electricity to UETCL the off taker, under long term PPAs. Payment terms are either on pay as you take or take or pay deals. 22

23 23 Mini Hydro Power Projects YearPlantDeveloper/IPPProject financing MW BugoyeTronder Power LtdBOO MW MpangaAfrica Energy Management Systems BOO MW IshashaEco Power LtdBOO MW Nyagak 1WENRECOBOOT

24 24 Mini Hydro Power Projects YearPlantDeveloper/IPPProject financing MW BuserukaHydromaxBOO MW KikagatiKikagati Power Co Ltd BOO MW NyamwambaAfrica Energy Management Systems BOO

25 25 Hydro Power Projects YearPlantDeveloper/IPPProject financing MW KarumaPPPBOOT MW IsimbaPrivate sectorBOOT MW AyagoPPPBOOT MW Nyagak 3WENRECOBOOT MW MuziziPrivate sectorBOO (GoU?)

26 Transmission Line Projects Project financing Most of the projects have been financed by multilateral agencies i.e. AfDB, World Bank and bilateral agencies i.e. NORAD,NDF,JBIC, JICA,SIDA,DANIDA and GoU as well as through the tariff. In the recent past new financing institutions have shown interest in financing some projects i.e. KfW,China Exim Bank, India Exim Bank 26

27 27 Transmission Line Projects YearProjectProject financing 2011Bujagali Interconnection project AfDB,JICA & GoU kV Bujagali Switchyard Upgrade JICA & AfDB

28 28 Transmission Line Projects YearProjectProject financing kV Mbarara-NkendaAfDB & GoU kV Tororo-Opuyo-LiraAfDB & GoU kV Bujagali-Tororo-LessosAfDB, JICA & GoU kV Mbarara-Mirama- Birembo AfDB, JICA & GoU kV Kawanda-MasakaIDA & GoU

29 29 Transmission Line Projects YearProjectProject financing 2014Nkenda – Kabaale – Hoima project NORAD/AFD kV Mutundwe-EntebbeKfW kV Opuyo-MorotoIslamic Development Bank & GoU

30 30 Transmission Line Projects YearProjectProject financing 2016Isimba Interconnection projectNORAD ? 2017Karuma Interconnection projectNORAD/AfDB & JICA ? 2020Ayago Interconnection projectJICA ? kV Hoima-Kinyara-KafuNORAD ? kV Lira-Gulu-Nebbi-AruaIDA ? kV Mirama-KabaleAfDB ?

31 31 Transmission Line Projects YearProjectProject financing kV Mirama-Kikagati-NshongeziNORAD ? kV Nkenda-Mpondwe-BeniNORAD under NELSAP ? kV Masaka-MwanzaIDA ?

32 32 Transmission Line Projects YearProjectProject financing kV Karuma – Nimule - Juba AfDB under IGAD & COMESA ? kV Agago - Achwa Interconnection 132kV ? kV Bulambuli-Kachumbala and associated Mbale s/s ?

33 Tariff structure in Uganda Transmission tariff UETCL acts as a single buyer and sole exporter and importer of power Prices between generation and transmission are bided or negotiated in form of Power Purchase Agreement UETCL sells power to distribution concessionaires at a Bulk Supply Tariff (BST) BST reflects the cost of power acquisition and transmission costs (O&M, ROI and mini investments cost provided in tariff) 33

34 Tariff structure in Uganda Generation tariff The price paid by UETCL depends on whether the transmission company is paying for capacity tariff or energy tariff The revenue requirement of generation component of tariff is made up of the following cost components i. The investment requirement ii. The operation and maintenance (O&M)component iii. The concession fee or lease component iv. Other costs such as regulatory fees and loyalties 34

35 Tariff structure in Uganda Generation tariff contd-GETFIT For small generation projects of less than 20MW, feed-in tariffs are applied established by the Renewable Energy Policy (2007) Feed-In Tariff (REFIT Phase 1) run from but had limited uptake by project developers In 2010, Renewable Energy Feed-In Tariff (REFIT Phase 2) commenced to encourage and support greater private sector participation in power generation from renewable energy technologies 35

36 Tariff structure in Uganda Generation tariff contd-GETFIT Electricity needs in the short and medium terms required a more aggressive program hence the special incentive scheme – GET FiT East Africa Program-Uganda pilot The main objective is to assist East African nations in pursuing a climate resilient low-carbon development path resulting in growth, poverty reduction and climate change mitigation. The premium of the Levelised Cost of Electricity will be paid as a top –up on the current REFIT levels Annual monitoring review shall be every financial year and comprehensive review every 3years 36

37 Revised Tariffs (Usc/kWh) TechnologyCurrent Refit Tariff Revised LCOE Premium increase over 20 years Hydro(9><=20MW) Hydro(1><=9MW) Hydro(500kW><=1MW) Bagasse Biomass Biogas Landfill gas Geothermal Wind

38 Challenges Unstable hydrology which impacts on hydro power generation Depreciation of the Uganda Shilling against foreign currencies Raising oil prices on the international market Lack of adequate spinning reserve The Bulk Supply Tariff is not yet fully cost reflective. Rampant vandalism of transmission lines Timely disbursement of GoU subsidy to UETCL Acquisition of way leaves Securing funding for new investments 38

39 39

40 Thank You 40


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