Swedish Embassy Aids Electricity Sector Growth

Uganda’s Energy sector has received a boost of Shillings 31.8-billion aimed at growing small electricity companies and cutting costs in selected production areas. The Inclusive Markets for Energy Efficiency project aims at “developing sustainable, inclusive markets for appropriate energy efficiency products and services for households, businesses, and institutions,” according to the Dutch development agency, SNV, the implementer.  

Of that fund, 7 billion Shillings have been set aside to provide grants for SMEs that are involved in the energy supply chain. Benefitting companies will either have to contribute part of the funds to the project or will have to present what they have already achieved in their project developments. The four-year initiative, funded by the Swedish Embassy, is expected to increase the adoption of energy-efficient products and services in agriculture and the built environment to support livelihoods and the resilience of businesses. 

The low uptake of efficient energy is characterized by limited awareness, limited availability of appropriate technology, perceived acquisition costs, poor quality of products, and limited skills as well as limited institutional coordination. Peace Kansimme, the project manager at SNV, says that the agriculture area will target maize, tea, and cooking oil production in selected districts.

As part of the response to increasing the development and adoption of energy-efficient products and services in agriculture and the built environment, SNV, together with the Makerere University College of Engineering, Design, Art, and Technology (CEDAT), and the Private Sector Foundation Uganda (PSFU) have launched efforts to catalyze “large-scale action” and support needed for the transition to clean, affordable energy for all.

According to her, the project will help capitalize energy service companies to boost supply capacity but also support agriculture production and processing to adopt energy-efficient products and technics, which would in the end increase demand for energy. 

According to the program, scaling the adoption of energy-efficient technologies, services, and practices across agriculture and built environment sectors is critical to reducing energy demand in the productive use of energy, increasing cost savings, and cutting greenhouse gas emissions from energy generation and use. 

Ola Hällgren, the Head of Development Cooperation at the Swedish Embassy in Kampala says the program will enable the beneficiaries to overcome the main challenges that hinder production, especially the costs but also improve environmental protection.   

He says that to address these barriers, a market systems development approach with targeted interventions at supply, demand, and enabling environment is required.

The IMEU project aims at contributing to the development of sustainable and inclusive markets for appropriate energy-efficient (EE) products and services for households, businesses, and institutions in Uganda. 

Kansiime says the project was designed after research showed that users of energy were concentrating on a few causes of the low uptake and high cost of energy, and overlooking the issue of energy-saving. This, according to her will involve behavior change to enable people to mind the way they use electricity, in addition to the appropriate technologies being supplied.

For years, the country’s electricity sector growth has been affected by the high costs as the main challenge, and this has ensured the number of people on the national grid remains below 30 percent, one of the lowest in the world. At more than 30 percent, solar energy, non-grid access has overtaken the national grid access rate but these stand-alone solutions are mainly for lighting and charging of light electronics. 

Apart from the limited infrastructure or network reach, many Ugandans see grid electricity as expensive, both to install and to maintain, at an average cost of about 720 shillings per kilowatt hour (unit). Peter Lokeris, State Minister for Energy and Mineral Development, says as the country slowly resolves the high cost of investments, especially the external financing of the projects, the cost to the final consumer will continue to go down.

David Birimumaso, the Acting Assistant Commissioner of Energy Efficiency at the Ministry says the projects especially in the agriculture sector will go a long way in helping efforts of environmental conservation. This, according to him, is because the crops that have been chosen are some of those that use a lot of electricity, with tea in particular using a lot of wood to generate energy.

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