In 2020, Uganda’s President, Yoweri Museveni, directed the Minister of Energy and Mineral Development to roll out the 5 US cents per KwH for industrialists,
UMA has been pursuing the implementation of the presidential directive through proposing the direct power purchase model which will allow manufacturers to receive power directly from generation and reduce the power tariff, especially for the manufacturers who consume 70% of the electricity generated.
Amendments to the Electricity Act were made to facilitate the implementation of direct power purchase and the Ministry of Energy and Mineral Development has since released regulations to guide the implementation process.
The good news is that a technical working committee comprised of the Uganda Manufacturers Association (UMA) and the Electricity Regulatory Authority (ERA), Ministry of Finance & Economic Development, supported by the Ministry of Energy and Mineral Development travelled to Namibia to benchmark the country’s implementation of the Modified Single Buyer Model and the Net Metering Model.
Namibia’s Electricity Control Board rolled out the Modified Single Buyer Model in 2019, which is similar to Uganda’s proposed Direct Power Purchase model. The Modified Single Buyer framework allows transmission electricity consumers and Independent Power Producers to transact with each other directly for the supply of electricity. Transmission customers can now buy up to 30% of their energy requirements directly from a private generator. The Modified Single Buyer also enables consumers to negotiate the tariff with the IPPs and is required to register fully as contestable customers.
By adopting the direct power purchase model, Uganda’s manufacturing sector will benefit from reduced power tariffs, attract more investments, create more jobs and boost economic growth. The Namibia benchmarking trip is a positive step towards achieving sustainable energy in Uganda, promoting economic growth and reducing the carbon footprint.
We are pleased to report this advancement, and we are firmly dedicated to improving your competitiveness.