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Country Study On Local Manufacturers, Financiers and Policy Status For Cogeneration Promotion In Uganda,

By

Stephen Emuria


EXECUTIVE SUMMARY

The aim of the study is to review the cogeneration sub-sector in Uganda with specific focus on the potential for local manufacture of cogen equipment spare parts in the country. The cogeneration industry creates jobs, promotes energy diversification, and generates additional income from agricultural and industrial sectors in Uganda. It provides a decentralized form of electricity, and improves local and general security of power supply.

The first chapter provides a brief overview of the Cogen for Africa Project and its key objectives. The chapter provides an overview of the fundamentals of cogeneration as well as reviews key components of a cogen plant. The study confirms that, quality and availability of feedstock, transportation costs, conversion technologies and power plant size are key determinants of the cost of electricity from biomass-based cogeneration plants.

The second chapter provides a brief overview of the local manufacturing sector in Uganda as well as examines, in some detail, key manufacturing companies in the country. It identifies available producers and local manufacturers of cogeneration spare parts in the country. The survey established that industrial manufacturing sector in Uganda is relatively small and is dominated by subsidiaries of multinational corporations. Few spare parts in the boiler and handling system are locally manufactured. The report, however, confirms that with the necessary capacity building support, Uganda has the potential to re-engineer some of the replaceable spare parts.

Chapter 3 focuses on existing and potential sources of finance for local manufacture of cogen spare parts in the country and also identifies challenges facing financial institutions in financing renewable energy investments. Interviews with the financial sector indicated that commercial banks are the main source of financing. Uganda’s financial sector was fully liberalized under the Government divesture program. The liberalization has opened opportunities for securing financial support from newly-liberalized finance sector for the country's renewable energy projects. A notable development in this regard, is the setting up of the Energy Credit Capitalization Company under the Ministry of Energy and Mineral Development to support and finance renewable energy projects.

Chapter 4 discusses policy options that can promote local manufacture of cogen spare parts in Uganda and confirms that new energy policies are being fast tracked for parliament debate. According to this study, the Cogen for Africa project has influenced the promotion of pro- cogeneration Policies in Uganda. This is notable in the sugar cane sector where, as s result of Cogen for Africa project support, a 3MW cogeneration plant expansion project was commissioned recently. The report ends with a chapter summarizing key findings and recommendations on the way forward.

This paper is available on an exchange basis. If you find it to be useful, we encourage you to send us any relevant publications from your organization. To request for the full paper, please fill in the publications request form

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