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INTERGRATION OF ENERGY ACCESS IN RURAL DEVELOPMENT IN UGANDA Benon Bena and James Baanabe Ministry of Energy and Mineral Development Uganda EU Energy Initiative.

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Presentation on theme: "INTERGRATION OF ENERGY ACCESS IN RURAL DEVELOPMENT IN UGANDA Benon Bena and James Baanabe Ministry of Energy and Mineral Development Uganda EU Energy Initiative."— Presentation transcript:

1 INTERGRATION OF ENERGY ACCESS IN RURAL DEVELOPMENT IN UGANDA Benon Bena and James Baanabe Ministry of Energy and Mineral Development Uganda EU Energy Initiative Workshop and Policy Dialogue Hotel VIP, Maputo, Mozambique April 2005

2 CONTENT OF THE PRESENTATION Background Policies on Energy and Poverty Energy for Rural Transformation Programme Selected Case Studies Igloo fish processing plant situated near Majanji Landing Site on lake Victoria in Busia District. Njeru – Kayunga – Bbale Rural Electrification Project Fish processing Plant at Bukakata Ssembabule Rural Electrification Scheme Kaweri Coffee Plantation Limited Solar Electrified Areas Conclusion

3 BACKGROUND Uganda has a population of 26 million, 87% rural, in scattered nature. Uganda has consistently registered high economic performance over the last decade Growth rate averaging 6% Annual increase in per capita income of 3.7% Reduction in people living below poverty line: 56% in 1992 to 38% in 2004 BUT Poverty remains wide spread in rural areas Per capita income $320 Inadequate infrastructure services Lack of integration with markets

4 Energy Situation In Uganda Biomass represents 93% of the national energy balance lowest per capita consumption of commercial energy in Africa energy demand growing oil products imported (100%) renewable energies are abundant but not largely disseminated electricity load shedding and low electrification rate 9% constrain the economic and social development

5 Electricity Access Access at national level only 9% Rural access to national grid only 3% Self electrification (gen-sets, PV, car batteries) about 1%

6 POLICIES ON ENERGY AND POVERTY Energy Policy Poverty Eradication Action Plan (PEAP) Power Sector Strategic Plan 1997, 1999 Rural Electrification Strategy and Plan 2001

7 The Energy Policy for Uganda GOAL: To meet the energy needs of Uganda’s population for social and economic development in an environmentally sustainable manner OBJECTIVES: To establish the availability, potential and demand of the various energy resources in the country To increase access to modern affordable and reliable energy services as a contribution to poverty eradication (Pillar 1, 2,5 of the PEAP) To improve energy governance and administration To stimulate economic development To manage energy-related environmental impacts

8 Poverty Eradication Action Plan Five Pillars in the PEAP Economic management Production, competitiveness and incomes Security, conflict-resolution and disaster- management Governance Human Development

9 Power Sector Strategic Plan (1997,1999) It spelt-out a new policy direction in the power sector and emphasized: Need to make power sector financially viable. Involvement private sector in electricity. Increase of access to electricity.

10 Electricity Act, 1999 Broke the monopoly of power utility-UEB Created a Regulator (ERA). made RE an obligation Establishment of Rural Electrification Fund (REF) Minister had to develop strategy & plan Special incentives for investments in RE

11 The Rural Electrification Strategy and Plan It spelt out the mechanism of Rural Electrification and the targets: Institutional framework for the Rural Electrification Fund. Increase of rural electrification from 1% to 10% by Combination of delivery modes : grid extension, off-grid systems, solar PVs and renewable energy projects.

12 The Rural Electrification Fund Channel for extending “smart subsidies”. Main sources of funding Government budget 5% levy from transmission bulk purchases from generation companies Grants from bilateral and multilateral donors Criteria for access based on: Financial and economic soundness of project Sound environmental impact statement Positive social return Equitable electricity distribution

13 ENERGY FOR RURAL TRANSFORMATION PROGRAMME (ERT) It is a ten year programme developed by GOU with support from World Bank/GEF. It is private sector led. Projects benefit from subsidies to buy down capital costs. The overall goal is to increase electricity access in rural areas from 1% to 10% by 2012.

14 It addresses several delivery mechanisms: Grid extension where feasible; Decentralized mini grids; Solar PVs; and Development of other renewable energy resources.

15 OPERATIONAL FRAMEWORK OF ERT ERT has strong linkage with key production and human resource sectors: Agriculture, Health, Telecommunication, Water and Education. Target areas are: District Headquarters, Trading Centers, Agro Processing areas, Schools, Health Centers and Rural Water supply units. Service delivery mechanism and Project Developers: Private Sector, NGO’s, Local Communities and local governments.

16 Lessons Learnt on ERT Private sector is reluctant to invest in RE projects. It perceive it as a high risk business- the thinking is have public leading is required Time it takes for private sector from project initiation to implementation is long Need to have subsides such as GEF financing to buy down capital cost which lowers the tariff. Unlike GEF, PCF does not considerably lower the tariff. Programmes being developed should address the problem of affordability and the high upfront costs.

17 Lessons Learnt on ERT Cont’d Linkages with other social and economic sectors in developing RETs is a big stimuli of development Need to employ a mix of service delivery methods : Grid extension where feasible; Decentralized mini grids; Solar PVs; and Development of other renewable energy resources.

18 SELECTED CASE STUDIES OF ENERGY INTERGRATION IN RURAL DEV Igloo fish processing plant in Majanji - Busia District. SME’s on Njeru – Kayunga – Bbale Rural Electrification Scheme Fish Processing Plant at Bukakata (Using a diesel generator) Ssembabule Rural Electrification Scheme Kaweri Coffee Plantation Limited in Mubende District

19 FISH PROCESSING PLANT IGLOO FOOD INDUSTRIES This is a fish factory situated near Majanji Landing Site on lake Victoria in Busia District. Provision of electricity to the site involved construction of a 10 km 33 kV line (three phase) Production Capacity: 40 tonnes of fish/day Number of people employed: 400

20 Majanji landing Site Fresh fish for the factory is received at this landing site Beneficiaries include about 74 fishermen

21 Ice Plant at Igloo Food Industries The company uses electricity to produce ice, to chill the fish and for refrigeration of the cold rooms. Ice Production: 60 tonnes/day. The ice produced is used by fishermen to preserve the fish immediately it is caught.

22 Loading Fish for Export Fish exports brings in foreign currency into the economy.

23 SME’S ON NJERU – KAYUNGA - BBALE – RURAL ELECTRIFICATION PROJECT The project completed in July 2000 included construction of a 92 km 33 kV line from Njeru to Bbale and provision of distribution transformers Major load centers on the project include, A stone quarry belonging to Nile Mining Company. 13 maize mills Five coffee factories Two milk cooling plants Three secondary schools and six primary schools A health unit

24 Coffee Processing Unit A small coffee processing unit connected to the grid. There are four other coffee mills connected to the grid.

25 Maize Mill Kayunga – Bugerere Road There are 13 such maize mills on the line

26 Bugerere Balunzi Diary Cooling Plant It belongs to a Cooperative society located in Baale. Capacity is 5000 litres a day. Serves about 120 farmers. Before the cooling plant was installed, the milk was taken to Kayunga town 44KM away. This greatly improved the milk quality reducing loses.

27 Bugerere modern farm cooling plant Situated between Kayunga-Bbale. It serves 20 farmers It handles 1800 litres of milk per day

28 Bbale Health Centre Main energy source used before electrification was kerosene and charcoal The hospital is connected to the grid now Electricity is used for: Lighting Sterilisation of hospital equipment & medical supplies Refrigeration of vaccines Powering equipment for limited operation

29 Kanjuki S.S.S This is one of the secondary schools connected to the grid. Electricity is used for: lighting the class rooms which has made reading at night possible. Lighting in dometries - which has improved quality of life of the students School in take has increased to 800 students half of them reside at the school.

30 FISH PROCESSING PLANT AT BUKAKATA, MASAKA It belongs to Fresh water fish exporters Ltd The factory currently uses a 265 kV diesel generator. It employs 250 people Factory capacity is 50 tonnes/day, however due to limited power, current production is 10 tonnes/day.

31 Bukakata landing site The site is on Lake Victoria in Masaka District Fresh fish is harvested here It serves 20 fishermen.

32 Ice making plant- Bukakata Cont’d The ice produced is used by fishermen to preserve the fish immediately it is caught

33 Company Fuel Service Station- Bukakata Cont’d Fuel consumption by the plant is about 600 litres per day.

34 Proposed Scheme for Extending Grid Power to Bukakata Proposed scheme will involve construction of a 35 km 33 kV line from Masaka to Bukakata Project cost has been estimated at Ug. Shs 1.5 billion. From Bukakata the line would be extended to Kalangala Island (If funds are available)

35 RURAL ELECTRIFICATION SCHEME IN SEMBABULE This involved construction of a 17 km power line from Matete to Ssembabule town and provision of distribution transformers. Electricity is used for: communication, car battery charging and in small enterprises in the town

36 Coffee Processing Plant in Ssemabule Processes 150 bags per day It serves about 100 farmers

37 Maize mill in Ssemabule One maize mill is in operation in the town. Previously the maize was grinded at a mill 10km away from Ssemabule

38 KAWERI COFFEE PLANTATION LIMITED Government is providing 23 km of 33 kV line to the plantation. 18 km has so far been constructed and commissioned Total project cost is US $ 10M. When completed, the company will employ about 6000 people.

39 Wet Coffee Processing Plant – Kaweri Plantations Ltd The wet processing plant has a capacity of 500 kg/hour. This is for carrying out trials.

40 100 kVA Transformer A 100 kVA transformer serving the wet processing plant, the residential quarters 3 transformers have been installed and powered. The remaining 2 transformers and 5 km of the line will be provided in the near future.

41 Coffee Plantation Peak production capacity of the plantations is expected to be 4000 tonnes of coffee per year.

42 CONCLUSION Good policy frame addressing energy is key in increasing energy access. Rural energy used in enterprises has added value to agricultural products, thus improving the farmers’ incomes. Rural enterprises resulting from energy access have provided employment, hence reducing poverty levels. People’s lives have improved through provision of energy for social services (health, education and water) Private –public partnership with the public leading

43 Thank You for Your Attention !!!

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