Uganda seeks power sector investors

Power-short Uganda is set to implement electricity sector reforms put in motion last year, including privatization of the Uganda Electricity Board. Government representatives have scheduled meetings with potential international investors in Kampala June 22, according to a statement released Wednesday.


Power-short Uganda is set to implement electricity sector reforms put in motion last year, including privatization of the Uganda Electricity Board (UEB). Government representatives have scheduled meetings with potential international investors in Kampala June 22, according to a statement released Wednesday.

Uganda currently suffers daily power rationing�and the loss of up to 90 productive days/year�caused by a 100 Mw power deficit, officials say. Uganda's Electricity Act, passed last November, allows private participation in the power sector and establishes the Electricity Regulatory Authority (ERA).

Ben Dramadri, former permanent secretary of the Ministry of Natural Resources, has been appointed ERA chairman. In March, with World Bank financial assistance, the Ugandan government retained a consortium of consultants led by Hagler Bailly Services Inc. to advise it on implementing the privatization of UEB and organizing a series of consultative meetings with various stakeholder groups, including potential international investors.

In June 1999, the cabinet approved the power sector restructuring and privatization strategy with the objectives of making the power sector financially viable, increasing efficiency, improving commercial performance, meeting growing demands for electricity, and increasing area coverage. The strategy also aims to improve reliability and quality, attract private capital and entrepreneurs; and take advantage of export opportunities.

The principal reforms called for are unbundling of the UEB into separate generation, transmission, and distribution businesses; privatization of each of the new businesses via concession; and establishment of an autonomous authority to regulate the power sector.

Blaming drought and poor export receipts, Uganda's government recently cut its 1999-2000 economic growth forecasts to 5.4% from earlier predictions of 7% but promised next year will be better. Economic growth will receive boosts, they said, from increased power generation and investment in telecommunications and roads. At least 80 Mw of a 200-Mw extension program to the Owen Falls Dam is expected to come on line by the end of the year.

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