Uganda European Times

Energy & Mining

Bujagali Dam

Bujagali Dam

Potential Energy and Mining Powerhouse

Uganda’s vast energy and mining resources are significantly under-exploited but the government aims to change that with the help of private investors. Uganda has come a long way in harnessing its considerable energy resources, increasing its energy-production capacity from only 60MW in 1986 to 645MW today. This total is expected to rise to 878 MW by the end of 2012 when new power plants at Bujagali (250 MW), Mpanga (18 MW), Buseruka (9 MW) and Ishasha (6.6 MW) reach full production.

Potential Energy and Mining Powerhouse

Uganda’s vast energy and mining resources are significantly under-exploited but the government aims to change that with the help of private investors. Uganda has come a long way in harnessing its considerable energy resources, increasing its energy-production capacity from only 60MW in 1986 to 645MW today. This total is expected to rise to 878 MW by the end of 2012 when new power plants at Bujagali (250 MW), Mpanga (18 MW), Buseruka (9 MW) and Ishasha (6.6 MW) reach full production.

The country still urgently needs more energy development, however. Electricity outages are common and only around 12% of Uganda’s population has reliable access to electricity supplies. In a recent presentation of the government’s 2013 budget priorities, Uganda’s Prime Minister Hon. Amama Mbabazi commented, “We will undertake measures over the next five years to improve the power supply so that Uganda’s per-capita energy consumption rises significantly from the current 69.5 kWh to 675 kWh in the long term. This will require stepping up our generation capacity from approximately 4,000 MW by 2016 to over 40,000 MW by 2040.”

To reach these ambitious goals, the government is counting on public-private partnerships as well as public-sector investment and support from global funding organisations. “Our 2013 budget will be focused on a long-term programme to invest in energy in order to generate adequate and affordable electricity,” the Prime Minister explains.

Of the energy produced in Uganda, traditionally 93% has come from fuel wood, 6% from imported petroleum and 1% from hydropower. To address the power crisis, the government has introduced a number of measures, including load-shedding and increased leasing and imports of thermal energy, an expensive short-term option. The government has also invested in upgrading distribution systems, promoting energy efficiency, and supporting solar, biomass and hydropower renewable-energy projects, including small hydro plants.

Uganda’s most prominent hydropower project is Bujagali Dam on the Victoria Nile, which is “the best long-term solution to help reverse Uganda’s power problem,” according to Project Director Glenn Gaydar of Bujagali Energy Limited (BEL), which won the bid to build the dam in 2005. BEL is owned jointly by US-based Sithe Global Power and Kenya’s Industrial Promotion Services. The project is also supported by the World Bank and other investors. Glenn Gaydar adds, “Bujagali Dam underscores the potential of privately funded hydro projects to meet regional energy demands.”

Petroleum discoveries to transform energy sector

The discovery of major petroleum deposits in Uganda’s Albertine Graben region is expected to cause a major shift in the country’s energy mix. The Prime Minister says, “We have already embarked on putting in place the legal and policy framework that will guide the management of our oil resources from upstream to downstream, as well as oil-revenue management. The recent signing of oil-production-sharing agreements between the government and private petroleum-exploration enterprises has paved the way for a new oil refinery to be built in 2013.”

Value-added mining projects

Uganda’s mining sector also offers exceptional development potential. According to Irene Muloni, Minister of Mining and Energy, Uganda has around 30 different minerals in deposits all over the country and around 80% of these deposits have been surveyed. The ministry has licensed several private investors involved in minerals exploration and is looking for more FDI, particularly in projects which will add value to the country’s minerals resources.

The top minerals being produced by mining operations in Uganda today, according to the ministry, are limestone, cobalt, wolfram, tin, kaolin and pozzolana, but many more are waiting to be exploited. The World Bank, the African Development Fund and the Nordic Development Fund have provided over €37.5 million in support to Uganda’s government for developing the mining sector, and the government has launched a number of investment incentives for mining companies.

Uganda is clearly moving to the next level in its energy development.