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Occasional  Paper 8: Power Sector Reform in Uganda- Proceedings of a National policy Seminar

Edited by

Ms. Joan Kyokutamba


Executive Summary

The African Energy Policy Research Network (AFREPREN/FWD) brings together 97 researchers and policy makers from Africa with a long-term interest in energy research. The Swedish International Development Association (Sida) has been the main financier of this network. AFREPREN/FWD supports appropriate policy research in the field of energy in East, Central and Southern Africa where professionals carry out research on important themes with the objective of strengthening local research capacity and harnessing planning and policy making.

In order for the researchers to share their findings with policy makers and also to garner more focused identification of research strategies, national policy seminars were proposed. These take place in the participating countries at least once a year during the research period.

This paper presents the results of the first national policy seminar for Uganda. The meeting was held at the Windsor Lake Victoria Hotel on 5th and 6th October 2000. The seminar focussed on the findings of the research that had addressed the topic Restructuring the Energy Sector in Uganda: The Privatisation Question. The power sector strategy of the Ugandan Government, together with the on going process of restructuring and privatising the sector, were analysed in depth. An outline of the evolution of reforms such as corporatisation and commercialisation, some of which were already implemented, was given. It was also noted that others such as unbundling, competition and out right privatisation were still being planned.

Participants in the seminar shared challenges facing the sector and charted out the way forward. Issues on power policy planning and formulation and how affordable modern energy can be made available to the population were addressed.  In addition, the performance of the power utility, Uganda Electricity Board (UEB), was discussed in some depth.

Case studies from Malawi, Uganda and Zimbabwe’s power sectors were reviewed. These studies demonstrate that state ownership and control, in combination with long unbroken periods of monopoly by the public sector power utilities, have contributed to electricity sector deficiencies. Both governments and utilities are equally responsible for poor performance of the power sector. It was, therefore, realised that changes in investment trends, economic and political motives and ensuring priorities of bi-lateral and multilateral organisations, drive reforms.  There was a general consensus that the power sector reform in Uganda was on course.

Having deliberated most of the outstanding issues at length and aware of the current strength of the economy; the capacity limitations of the power sector; the limited demand that the Ugandan market controls; and the demanding expertise that regulatory controls entail, the participants made several recommendations.

Of particular concern is the inadequacy identified in the effectiveness of the Electricity Regulatory Authority, especially its independence from the Government which needs to be reviewed as a matter of urgency. This will enable the Authority to embark on capacity building of its management and regulatory skills. The meeting further pointed out that reforms should spell out pre-conditions for investors who may wish to tap into the main grid. Now with the new electricity law in place, the Government could consider licensing the existing co-generators such as Kilembe Mines, Kasese Cobalt Co. Ltd., Kakira Sugar Works as independent operators without further delay.

For them to be effective, reforms should generally be acceptable to all stakeholders and should strive to establish commercial tariffs. At the same time, a structured subsidy for rural electrification needs to be put in place. This should be pegged to individual consumer’s ability to pay for power so that subsidies can benefit those with limited finance.

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