More power coming after government pays firms
President Museveni switches on the Ishasha mini-hydropower station in Kanungu District yesterday. The 6.5 MW hydropower station, that will also supply power to Rukungiri, Ntungamo, Kabale and Kisoro districts, comes as a relief to the recent 24-hour load-shedding. Left is Mr Vellupellai Kananathan, the managing director of Imperial Group of Companies. Photo by PPU
What you need to know:
The move is expected to bring relief to power consumers who have been grappling with load-shedding.
Kampala
Power consumers could soon get relief from the constant load-shedding, after the government released Shs62.3 billion ($25 million) to power firms.
The ministry of finance released the funds last week, following a Cabinet directive to the ministry to negotiate with thermal power generation companies the modalities of settling their arrears amounting to over Shs300 billion incurred since July.
Aggreko is said to have received Shs22.2b ($9m), Elecromaxx Shs4.9b ($2m) and Jacobsen Shs32.4b ($13m). Energy State Minister Simon D’Ujanga said Cabinet set up a special team headed by the Secretary to the Treasury, Mr Keith Muhakanizi, to negotiate with thermal power generation companies the modalities of settling the arrears before June 30, 2012.
The arrears will be paid in installments, according to Eng. D’Ujanga. The ministry of finance released the funds last week, following a Cabinet directive to the ministry to negotiate with thermal power generation companies the modalities of settling their arrears amounting to over Shs300 billion incurred since July.
Aggreko is said to have received Shs22.2b ($9m), Elecromaxx Shs4.9b ($2m) and Jacobsen Shs32.4b ($13m).
Energy State Minister Simon D’Ujanga said Cabinet set up a special team headed by the Secretary to the Treasury, Mr Keith Muhakanizi, to negotiate with thermal power generation companies the modalities of settling the arrears before June 30, 2012.
The arrears will be paid in installments, according to Eng. D’Ujanga. Mr Muhakanizi said the payments were processed last Friday to enable the power plants switch on their generators to reduce the persistent load-shedding in the country.
Despite the payments, Aggreko thermal power generation company is yet to switch on its generator. A reliable source who asked not to be named because he is not authorised to speak on behalf of the firm said the government still owes Shell Uganda Shs62.3billion ($25million) for supplying diesel to thermal power plants.
Against that payment, the source said, Shell has refused to release fuel to Aggreko. “Aggreko is willing to switch on the plant as soon as we get fuel even if it is tonight. But the government is still negotiating payment terms with Shell. There might be some lights on soon,” the source added.
Shell Uganda country manager Ivan Kyayonka said there were payment problems but significant discussions were taking place and hopes they will yield good results.
Uganda’s electricity demand outstrips supply with the maximum demand for power at peak hours standing at 445 megawatts (MW) against the available supply of 334MW, while maximum demand at shoulder and off-peak stands at 350MW and 300MW respectively.
Mr Muhakanizi said the payments were processed last Friday to enable the power plants switch on their generators to reduce the persistent load-shedding in the country.
Despite the payments, Aggreko thermal power generation company is yet to switch on its generator. A reliable source who asked not to be named because he is not authorised to speak on behalf of the firm said the government still owes Shell Uganda Shs62.3billion ($25million) for supplying diesel to thermal power plants.
Against that payment, the source said, Shell has refused to release fuel to Aggreko. “Aggreko is willing to switch on the plant as soon as we get fuel even if it is tonight. But the government is still negotiating payment terms with Shell. There might be some lights on soon,” the source added.
Shell Uganda country manager Ivan Kyayonka said there were payment problems but significant discussions were taking place and hopes they will yield good results.
Uganda’s electricity demand outstrips supply with the maximum demand for power at peak hours standing at 445 megawatts (MW) against the available supply of 334MW, while maximum demand at shoulder and off-peak stands at 350MW and 300MW respectively.
The current shortfall is thus primarily a result of government’s failure to pay thermal power generators. Although Electomaxx said it had received money from government, Aggreko said it is yet to receive its share.
Aggreko and Electromaxx shut down generators recently following governments’ failure to pay arrears, forcing Umeme, the power distributor, to institute a 24-hour load-shedding across the country.
By September, government owed Aggreko Shs68 billion in arrears while Shs47.3b was owed to Jacobsen.
However, Electromaxx agreed to switch on its generator irrespective of payment challenges according to the firm’s chief executive officer, Mr Charles Muhumuza. He is, however, optimistic that the issues will be sorted out.
Umeme chief executive officer Charles Chapman said if Aggreko switches on its plant, load-shedding would significantly reduce but added a more sustainable option is by bringing on board the Bujagali hydropower project.
However, the 250MW Bujagali hydropower project is expected to generate the first 50MW early next month, although it had been expected to come on stream by this month. The additional 200MW are to be generated by the end of April next year.
Households and businesses across the country have been affected by persistent load-shedding which is estimated to cost the Ugandan economy about Shs60 billion daily.
Recently, traders in Kampala staged demonstrations over the resumed 24-hour load-shedding, which has affected their business operations, leading to massive losses.
