BUSINESS: Umeme injects Eastern Uganda with UGX56bn to power industries and job growth

BUSINESS: Umeme injects Eastern Uganda with UGX56bn to power industries and job growth

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KAMPALA – Umeme Limited, Uganda’s largest power distributor has invested up to USD15.2 million (UGX55.7 billion) to improve both power supply quality and reliability in the greater Mbale area. This includes both Mbale city and surrounding districts such as Sironko, Manafwa, Kibuku, Pallisa, Kumi, and Kapchorwa.

Of this investment, USD9.23 million (UGX34 billion) is being invested in the Siti 2 Project, while USD5.99 (UGX22 billion) has been allocated to the Tangshan Mbale Industrial Park Project. Both projects are ongoing. The Siti 2 project is due for completion by end of August 2020, while the Tangshan project is due for completion at the end of 2020.

On completion, both projects will increase the supply of stable and reliable power in the area by three-fold, from the current 20 MW to well over 61 MW.

Siti 2 Project includes evacuating power from the new 16.5 MW Siti 2 Hydro Power Project (HPP) on River Siti in Bukwo District via 125-kilometre 33kV single circuit double poles line to Umeme’s Mbale substation, on the outskirts of Mbale City. At the substation, the power will be stabilized at a state of the art switching station and plant house for distribution to industrial, commercial and residential clients.

To meet the anticipated faster-than-normal growth in demand following the launch of the Sino-Uganda Mbale Industrial Park, Umeme’s Tangshan Mbale Industrial Park Project is extending an additional 25 MW from the Uganda Electricity Transmission Company Limited’s (UETCL) substation in Mbale via a 75km power line. Once power reaches the industrial park, it will be stabilized at a new under-construction switching station and then distributed via a 10km power distribution network, also being built by Umeme. Umeme has also spent an additional USD1,000,000 (UGX3.7 billion) on compensating project affected persons along the line. This project that started on 7th May 2020 is scheduled for completion by the end of December 2020.

“The Mbale projects are one of our major investments for 2020 in support of government’s efforts to attract industries and jobs in the eastern region,” Babungi told the media on a recent tour.

Industrial parks are the future of Uganda’s development

The 619-acre, the Sino- Uganda, Mbale Industrial Park, according to the developers, looks to attract between 60-80 factories, which at peak will consume up to 220 MW of power. Eight factories have been built since the park was launched by President Museveni in March 2018. Four factories, according to Mr. Dary Lee the park’s administrator are already running, using up to 3 MW of power and employing up to 1,500 Ugandans.

“Having been granted city status, we expect demand in Mbale City and the surrounding areas to grow considerably fast. Current demand is about 20 MW but the industrial park alone is expected to consume 220 MW of power at full capacity. In addition to the industrial park, there is a cement factory in the pipeline in Mbale,” he said.

“Industrial parks are the future of industrialisation in Uganda because they guarantee a lower cost of production per unit. The Mbale Industrial park particularly because of its proximity to the Kenyan border and subsequently the Mombasa Port, is strategic for both import substitution and export-based factories,” Babungi added.

Godfrey Bwire, the Umeme Customer Services Engineer, Networks said that while previously electricity demand in Mbale had grown at an average 1 percent annually, in 2019 alone, demand had jumped by 5 percent.

Eng. Job Watti, the Umeme Projects Manager, told the media that over and above the 61 MW projected by the end of December 2020, additional capacity is expected from a new UETCL transmission sub-station planned for 2021 in Mbale.

Umeme investing UGX310 bn to stabilise power and increase grid connections

Babungi said that Mbale investment is part of Umeme’s USD83.3 million (UGX 310 billion) 2020 investment plan to increase grid connections and improve power reliability. This is a 7.2 percent increase in network investments, from the UGX289 billion the utility company spent in 2019.

The UGX310 billion is being invested in six core areas, namely, addressing energy losses and improving operational efficiency at a cost of USD26.89 million; addressing load demand growth at a cost of USD22.72 million, and improving power supply reliability at USD18.89 million. Other core areas include, the evacuation and supply of electricity from various generation facilities across the country at USD10.79 million; network systems automation at USD1.93 million and Network protection and security at USD2.06 million.

The 2020 investment plan is itself part of Umeme’s larger USD450m (Shs1.7 trillion) 2019-2025 investment plan in support of the government’s Electricity Connections Policy 2018-2027, which targets to increase access to electricity from the current 28 per cent to 60 per cent by 2027 and subsequently 80 per cent by 2040.

Cumulatively, Umeme has to date invested $656 million into Uganda’s power distribution network, increasing the number of customers by 1,210,000 from the 290,000 it inherited in 2005 to now over 1,500,000 customers. The investments have also reduced power losses from 38% as of 2005 to 16.4% as of 2019.

In 2019 alone, Umeme connected 180,000 new customers, 178,152 of whom financed by the Government of Uganda and development partners under the Electricity Connections Policy.

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