Uganda, Kenya seal power deal

This means that Kenya’s electricity generation company, Ken Gen, will sell power to Uganda Electricity Transmission Company (UETCL), the bulk supplier/wholesaler of power in Uganda under the MoU.

Uganda decided to sign the supply agreement after shelving plans to have Ken Gen procure and install a 50MW thermal generator exclusively for Uganda.

Government was looking to go around logistical challenges when it first came up with the proposal to have a generator installed in Nairobi to generate power exclusively for the Uganda market.

Mr Eriasi Kiyemba, the managing director UETCL, told Business Week in an interview last week that plans for an exclusively Ugandan thermal generator in Nairobi fell through when it was realised little saving would be made.

Today, Aggreko, the operators of the only thermal plant located at Lugogo near Kampala are charging UETCL about US 21 cents. Under the deal, Ken Gen will charge between US 23-25 cents for the power they will supply.

“But when prices are more or less the same, there are other factors like security of the line and loss of power that we considered. That is why we have decided to have the plant here and not in Nairobi,” Kiyemba said.

UETCL will pay US 23-25 cents depending on the prices of oil on the market. The issue of pricing was a stumbling block at some point and almost threatened the deal.

This new additional power is bound to ease load-shedding. Since February, Uganda has been suffering 12-hour a day load-shedding, which has negatively affected all sectors of the economy.

“We have signed an energy deal that will enable us have additional power of up to 30MW as and when Kenya makes it available. It is not a firm commitment so it does not mean that Kenya is supposed to supply us all the time,” Kiyemba explained.

Energy and Mineral Resources Minister Daudi Migereko told the Press in Kampala last week that daytime power rationing is set to reduce slightly because of the short-term measures that government has been working on, among them the 30MW import of power from Kenya.

Migereko said Aggreko Power Company has commenced installation of a 50MW thermal power plant at Jinja while supply under the up to 30MW deal commenced on July 25.

Migereko, however, said Ugandans have got to wait until May next year when a 50MW heavy fuel oil thermal power plant, stationed at Namanve, will come online. The government is also set to commence distributing the first batch (500 000) of energy-saving bulbs in October.

Migereko said government will import 800 000 bulbs, which have the potential to save the grid 50MW, which can then be availed for industrial production.

Manufacturing has suffered the greatest damage from the power supply crisis, with some factories halving production by 50 percent.

One worrying aspect even as government implements both short and long-term measures, is that the water levels in Lake Victoria are taking longer than before to return to normal levels. ‘ East African Business Week.

August 2006
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