Oil-rich Albertine region to become Uganda’s energy hub

Saturday February 2 2013

By JULIUS BARIGABA The EastAfrican

Uganda plans to cut its power deficit with the launch of two energy projects in the oil rich Albertine region.

The Kinyara Sugar Works will soon inject 30MW into the national grid, while the completion of the Kabalega mini hydropower dam at Buseruka, Hoima district in Western Uganda, will inject nine megawatts.

The Buseruka power station, commissioned on January 25, by President Yoweri Museveni, is one of the smallest — in terms of generation capacity — of the projects planned in the oil rich Albertine region.

“These projects are at different stages of planning or development, but the Albertine region is going to be an energy hub for thermal, geothermal and mini hydros,” said Gerald Muganga, the Investments and Planning Manager at Uganda Electricity Transmission Company Ltd.

For instance, the same developer for Buseruka Hydromax, is to build a five megawatts mini-hydropower dam at Waki River in the nearby Masindi district, while Kinyara’s 30MW produced from bagasse only awaits the completion of substations and transmission lines by the electricity company to evacuate the generated electricity into the rest of the national grid.

The $38.8 million Buseruka project was funded by the African Development Bank and PTA Bank and will generate enough electricity to power over 1,000 households, schools and hospitals in the Albertine region, and feed into the national grid at the Hoima substation.

These investments could see the Albertine region become the country’s leading power generator, as its production peaked at 487MW after the full commissioning of the 250MW Bujagali Hydroelectric Power Station last October.  

At Kabaale in Hoima district, where Uganda’s oil refinery is to be built, will be a 53MW thermal power plant that will be upgraded to 57MW, and eventually to 700MW, powered by heavy fuel oil. In addition, there is a planned 150MW geothermal power plant at Kibiro in the same district.

Besides Hoima, the other districts of the region are Masindi, Buliisa, Kibaale and Kiryandongo — the latter being home to the planned 600MW Karuma hydropower dam.

Uganda plans an ambitious generation capacity of 3,800MW by 2016, mainly through investments by the private sector, in a bid to connect 350,000 people on the grid and 800 small and medium-sized enterprises.

The Uganda Energy Credit Capitalisation Company said more electricity generating projects are in the pipeline through a grant of $17.6 million from the Dutch ORIO infrastructure fund, which will develop 10 mini hydro sites with capacities ranging from 1MW-15MW each for rural electrification.

Feasibility studies for the projects are due to be carried out in February this year by Royal Haskoning, an international engineering and consulting firm.

“We are trying to support participation of the private sector in renewable energy resource development,” said Roy Baguma, the execution manager at the Uganda Energy Credit Capitalisation Company.

Uganda’s economy was liberalised in 1998, with the government requiring that all mini hydro projects below 20MW be developed by the private sector, but this was never implemented because of risks associated with the power sector.

Now however, the Uganda Energy Credit Capitalisation Company is working to bridge this gap by facilitating investors, intervening through guarantees and credit enhancement instruments for the private sector.

Additional reporting by Esther Nakkazi

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