Energy officials tasked by Museveni to lower electricity rates

The President argued that low electricity tariffs and low cost of transportation of goods and services are key components for propelling the Ugandan economy to the upper rungs of middle-income status.
“If you want a modern economy, you must handle the four sectors as I have told you but in order to modernise these sectors, ensure low costs of electricity. Have cheap, reliable and affordable electricity,” he said yesterday at the commissioning of Karuma power plant in Kiryandongo District.
His remarks followed a revelation that electricity generated from the dam would be charged to consumers at 4.78US cents/kilowatt-hour compared to those from the other hydropower dams currently at an average of 6.47 cents/kW-hr.
“When we are here at Karuma, we are dealing with strategic stimuli, a reduced cost of electricity to spur development, I don’t want to hear anybody say again that we now have enough electricity; we need more investments in the electricity sector, " he stated.
“I am part of the happiness which the people are showing, the Karuma electricity is much cheaper than Bujagali hydropower dam, and the one of Bujagali was done by some careless people behind my back,” he added.
While Uganda’s electricity per capita consumption stands at about 218kWhr compared to Norway’s 15,000kWhr, the President challenged the ministry to guide the government on raising consumption.
“That is what the Ministry of Energy should be guiding us on how to boost consumption, that is a modern person with a fridge, lighting in the house, including factories, transport of vehicles, and the railway since we are moving for electric trains,” he said.
The President cited China, which, he said, had leapfrogged Europe in manufacturing on account of reduced electricity costs.
“If we want a modern economy, the goods you produce must be low in cost and cheaper, otherwise people will not buy your products. We were buying goods from Europe but now they are not there, we have goods from China, Asia, and how the Europeans were chased away from the business because of their high transport costs and expensive products,” he added.
Past concerns
Mr Museveni has variously said the high cost of power from some privately funded power plants is distorting power prices in the country.
Former Ministry of Energy Permanent Secretary, Kabagambe Kaliisa, in whose tenure the Karuma dam project was conceptualised and signed off, said significant investments are required in the transmission and the distribution infrastructure. “If the country is to realise the full benefit of the 6000MW Karuma Hydropower plant and realise reduced tariffs, increase the connection of people to the national grid, this will lead to a fall in electricity tariffs,” Mr Kaliisa said.
According to him, the most memorable part about Karuma dam is about how the government was able to raise the funding for the project since there was limited prior planning of the investment.
“As an accounting officer and head of the technical team, we had about $300m of the required $1.4 billion we needed for the entire project. Yes Karuma has come on board but it is important that we don't sleep, we should be setting aside money for the next project," he noted.
Call for connectivity
Speaking on the sidelines of the commissioning of Karuma dam, the Chief Executive Officer of the power regulator, the Electricity Regulatory Authority (ERA), Ms Ziria Tibalwa Waako, noted that as the country increases its generation capacity, it needs to go hand in hand with increased connectivity.
Ministry of Energy’s Permanent Secretary Irene Bateebe said the new power plant will play a pivotal role in Uganda’s energy landscape, bringing the country’s total generation capacity to more than 2,000MW, up from 394MW 20 years ago.
“Peak demands have also grown from 257MW in 2004 to 988MW in 2024 driven by robust economic growth and expanding electrification. This growth is a clear reflection of the substantial investments made in the energy sub-sector in the past two decades driven by robustness,” Ms Bateebe said.
BACKGROUND
Karuma Hydropower Project has two components; The underground power plant and three transmission lines; 248km Karuma – Kawanda 400kV line, 55km Karuma – Olwiyo 400kV line, and 75km Karuma –Lira 132kV line. The project cost $1.688b (Shs6.2 trillion), of which $1.435b (Shs5.2 trillion) was a loan from the Export–Import (EXIM) Bank of China while $253.26m (UGX933 billion) was from the Government of Uganda.