with basic technical skills. Such artisans that ensure
ready access to spare parts require specialized training. Generally, inadequacies in such auxiliary industry
expertise results in increased cost of RE projects which
further complicates the deployment of RET as supported by Murphy, Twaha, & Murphy (2014). The state
of Uganda’s affairs in relation to training facilities,
operation, and maintenance of RETs is still deficient
4.2.2 Prohibitive costs of investment and operation
The high investment cost for renewable energy projects
has generally been one of the limiting factors. This cascaded into the unaffordability of energy especially by
rural communities even when provided by the independent power producers. The cross-cutting challenge has
been the unavailability of micro-finance schemes for
the renewable energy technologies customized for the
rural areas. The available alternatives for such financing have been the banking sector whose lending costs
have been prohibitively high (typically at rates as high
as 25% per month). A good proportion of Uganda’s
population have no or limited access to institutional
micro-finance services and thus rely largely on moneylenders, suppliers, family, and friends for short-term
seasonal loans which may not sufficiently support
such investments in energy project. Also, given the
limited secure savings options available to the households at the local community level the populace has
been unable to build a relevant asset base that would
over time support investments in renewable energy
initiatives.
Additionally, the marketing and maintenance structure for the renewable energy technology devices in
rural areas have been hard to come by. Running rural
outlets has not been considered profitable due to the
high costs for the transportation and mobilization of
the dispersed nature of the population, low incomes,
and low demand that further complicate the status
quo. A critical barrier to the development of RE
technology rests on the high initial investment and
installation costs of RE equipment. The also eroded
the investor con?dence aggravated by the overall inadequacy of ?nancing tools. Further, given the increased
costs of investment in RE equipment and devices
some unscrupulous persons have taken advantage of
this void to supply sub-standard and most times fake
energy equipment such as the solar PV system components which fail shortly after they are installed or
commissioned. It has therefore been very dif?cult for
an average Ugandan/company to invest in RE technology systems. Additionally, before obtaining a license
for the construction of a power generating facility, it
has been a prerequisite to conduct feasibility study
as well as environmental impact assessment (EIA).
These require hiring consultants who may not be easily affordable to local developers on account of limited
funding options.
4.2.3 Bureaucracy and mis-coordination
The inefficiencies associated with Uganda’s public service, by defaults aligned the administrative systems to
bureaucracy across the spectrum of decision-makers.
Based on varying mandates, it has been difficult to find
a common denominator among concerned actors. For
instance, while the Electricity Regulation Authority
(ERA) issues permits and licenses for the generation of power; the Ministry of Energy and Mineral
Development (MEMD) and the Renewable Energy
Agency (REA) issues support agreements and subsidies in relation to rural electrification schemes;
the Directorate of Water Development sanctions the
utilization of water resources; and the National Environmental Management Authority (NEMA) provides
clearance on Environmental Impact Assessment; the
Uganda Investment Authority (UIA) issues the investment licenses; and finally the local governments of
the areas where the project is planned provide ground
clearance to commence the initial operations, among
others (MEMD, 2018). It is not strange to find that
regulations are overlooked in certain areas for lack of
a robust monitoring mechanism because of the level of
manual configuration of the regulating agencies.There
were therefore involuntary project delays occasioned
by such manual operations of the concerned regulators
which frustrate investment. Whereas the planning was
gradually adapting to a long-term orientation, it had
assumed a short run dimension due to the lack of data
and information to support strategic decision-making
based on informed long-run projections.
The private sector in Uganda has played an increasingly important role in the energy sector, especially
since the enactment of 1999 Electricity Act. One of
its critical deficiencies however was associated with
government’s failure to develop a comprehensive policy framework that would inspire investments in the
nuclear and thermal energy. There is a need to revise
the existing laws with an emphasis to gradually adopting smart grid technologies and to support the prosumer movement in the renewable energy sub-sector.
International experience suggests that co-operation
between the public and private sectors in the form of
public–private sector partnerships (PPP) can be a powerful incentive for improving the quality and efficiency
of public services, and means of public infrastructure
financing. Sadly, the extensive and sophisticated level
of corruption that apparently exists among the PPP
has not only curtailed the efficiency of some of the
energy projects but has rendered most partnerships less
effective.
4.2.4 High power tariffs and grid unreliability
Due to low household connectivity capacity and the
limited coverage of the national power grid, electricity
access remains very low with only 6% of rural households have access to grid power as compared to 40% of
urban households (MEMD, 2020). This has been partly
attributed to the high prevailing power tariffs (National
Development Plan III, 2020). Attempts to fast track the
construction of new transmission lines to distribute
power from new plants have been slow. A case in point
was the Ayago dam in which government had to pay
for deemed power after failure to construct a power
221
ready access to spare parts require specialized training. Generally, inadequacies in such auxiliary industry
expertise results in increased cost of RE projects which
further complicates the deployment of RET as supported by Murphy, Twaha, & Murphy (2014). The state
of Uganda’s affairs in relation to training facilities,
operation, and maintenance of RETs is still deficient
4.2.2 Prohibitive costs of investment and operation
The high investment cost for renewable energy projects
has generally been one of the limiting factors. This cascaded into the unaffordability of energy especially by
rural communities even when provided by the independent power producers. The cross-cutting challenge has
been the unavailability of micro-finance schemes for
the renewable energy technologies customized for the
rural areas. The available alternatives for such financing have been the banking sector whose lending costs
have been prohibitively high (typically at rates as high
as 25% per month). A good proportion of Uganda’s
population have no or limited access to institutional
micro-finance services and thus rely largely on moneylenders, suppliers, family, and friends for short-term
seasonal loans which may not sufficiently support
such investments in energy project. Also, given the
limited secure savings options available to the households at the local community level the populace has
been unable to build a relevant asset base that would
over time support investments in renewable energy
initiatives.
Additionally, the marketing and maintenance structure for the renewable energy technology devices in
rural areas have been hard to come by. Running rural
outlets has not been considered profitable due to the
high costs for the transportation and mobilization of
the dispersed nature of the population, low incomes,
and low demand that further complicate the status
quo. A critical barrier to the development of RE
technology rests on the high initial investment and
installation costs of RE equipment. The also eroded
the investor con?dence aggravated by the overall inadequacy of ?nancing tools. Further, given the increased
costs of investment in RE equipment and devices
some unscrupulous persons have taken advantage of
this void to supply sub-standard and most times fake
energy equipment such as the solar PV system components which fail shortly after they are installed or
commissioned. It has therefore been very dif?cult for
an average Ugandan/company to invest in RE technology systems. Additionally, before obtaining a license
for the construction of a power generating facility, it
has been a prerequisite to conduct feasibility study
as well as environmental impact assessment (EIA).
These require hiring consultants who may not be easily affordable to local developers on account of limited
funding options.
4.2.3 Bureaucracy and mis-coordination
The inefficiencies associated with Uganda’s public service, by defaults aligned the administrative systems to
bureaucracy across the spectrum of decision-makers.
Based on varying mandates, it has been difficult to find
a common denominator among concerned actors. For
instance, while the Electricity Regulation Authority
(ERA) issues permits and licenses for the generation of power; the Ministry of Energy and Mineral
Development (MEMD) and the Renewable Energy
Agency (REA) issues support agreements and subsidies in relation to rural electrification schemes;
the Directorate of Water Development sanctions the
utilization of water resources; and the National Environmental Management Authority (NEMA) provides
clearance on Environmental Impact Assessment; the
Uganda Investment Authority (UIA) issues the investment licenses; and finally the local governments of
the areas where the project is planned provide ground
clearance to commence the initial operations, among
others (MEMD, 2018). It is not strange to find that
regulations are overlooked in certain areas for lack of
a robust monitoring mechanism because of the level of
manual configuration of the regulating agencies.There
were therefore involuntary project delays occasioned
by such manual operations of the concerned regulators
which frustrate investment. Whereas the planning was
gradually adapting to a long-term orientation, it had
assumed a short run dimension due to the lack of data
and information to support strategic decision-making
based on informed long-run projections.
The private sector in Uganda has played an increasingly important role in the energy sector, especially
since the enactment of 1999 Electricity Act. One of
its critical deficiencies however was associated with
government’s failure to develop a comprehensive policy framework that would inspire investments in the
nuclear and thermal energy. There is a need to revise
the existing laws with an emphasis to gradually adopting smart grid technologies and to support the prosumer movement in the renewable energy sub-sector.
International experience suggests that co-operation
between the public and private sectors in the form of
public–private sector partnerships (PPP) can be a powerful incentive for improving the quality and efficiency
of public services, and means of public infrastructure
financing. Sadly, the extensive and sophisticated level
of corruption that apparently exists among the PPP
has not only curtailed the efficiency of some of the
energy projects but has rendered most partnerships less
effective.
4.2.4 High power tariffs and grid unreliability
Due to low household connectivity capacity and the
limited coverage of the national power grid, electricity
access remains very low with only 6% of rural households have access to grid power as compared to 40% of
urban households (MEMD, 2020). This has been partly
attributed to the high prevailing power tariffs (National
Development Plan III, 2020). Attempts to fast track the
construction of new transmission lines to distribute
power from new plants have been slow. A case in point
was the Ayago dam in which government had to pay
for deemed power after failure to construct a power
221