{UAH} Involve private sector in energy development

The government should find ways to increase private sector participation in renewable energy development. This
will scale up resources for deployment of alternative renewable energy sources that remain largely untapped;
it will also increase the much-needed energy supply in the country.

This is critical as Uganda cannot achieve its desired economic development without adequate and affordable
energy services.

Energy is still inadequate, inaccessible, unreliable and unaffordable to the common man and woman in Uganda
and power in Uganda remains the most highly priced in East Africa.

This is even more heightened in rural areas where access to modern energy still lags behind at less than 4 per
cent, yet most of Uganda's population is rural-based.

The energy shortage in the country and the ever-growing energy requirements like the recent commissioning of a
mega steel factory in Namanve, Mukono District that will consume up to 48MW of power, necessitates government
to look to local resource mobilisation in development of alternative renewable energy sources to increase
energy supply. Increased investments in renewable energy are required to achieve sustainable energy for all,
for the well-being of the poor and for environmental sustainability.

The government should recognise the role private sector can play through public –private partnerships as this
remains one of the viable ways through which to scale up resources for development of alternative renewable
energy sources, to achieve the supply and demand balance, deliver affordable energy services to Ugandans, for
grid extension in rural areas, as well as for off grid systems based on renewable energy technologies for
remote areas.

It is, therefore, necessary for government to take measures that will attract private sector participation in
renewable energy development. There is need to increasingly engage private sector and renewable energy
projects should be well designed to attract the necessary finance from the private sector.

The investment climate in Uganda needs to be improved; constraints such as government red tape and
bureaucratic tendencies that bring about unnecessary delays and lengthy procedures that restrain private
sector investors should be dealt with and replaced with faster and more transparent systems.

Investor perceptions and concerns on corruption should be allayed by having more transparent systems and
corruption suspects should be investigated and punished. Also, the criteria on incentives should be more
transparent.

Risk mitigation facilities should be established for renewable energy projects and initial project development
of capital intensive projects can be undertaken by the government as a way of risk mitigation since there are
many risks associated with development of renewable energy projects. This will spur local financing for these
projects, especially at small scale level.

Private sector involvement and investment in renewable energy development will increase energy supply for more
Ugandans to get access to cheaper and cleaner energy and draw the country on a path to achieving sustainable
energy for all.

Diana Taremwa, Africa Institute for Energy Governance
dtaremwa@afiego.

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