A Norwegian firm, Jacobsen Elektro Holdings AS, will in 2016 commission the construction of a 100-megawatt Heavy Fuel Oil thermal power plant in Hoima District. The plant is expected to cost $170m (Shs436.9b). About $25.5m (Shs65.5b) will be contributed by government of Uganda.
The plant could act as a spur to the establishment of industries in the area, which would create job opportunities for the unemployed people in the area. Through an application to the Electricity Regulatory Authority (ERA), Jacobsen said, “Water usage for the plant, although minimal, may impact on the current levels of surface and groundwater quality and quantity.” ERA is reviewing the application.
State minister for Energy, Simon D’Ujanga told the Daily Monitor on Friday on phone the plant is needed to secure Uganda’s electricity supply. “We need the plant because the demand for electricity is increasing. A drought can impact negatively on hydro electricity generation. HFO will be a permanent fixture of our energy mix for security of supply,” said Eng D’Ujanga.
Two thermal plants, Electromaxx and Jacobsen, currently feed 14MW into the national electricity grid. The plant to be built in Hoima is one of the many projects the government is promoting to ensure the unmet demand for electricity does not outstrip supply since that would slow economic growth. Also lined up for commissioning in 2016 is the 50MW Namugonya Solar Power Plant.
Another 20 small renewable electricity projects with a combined capacity of 125MW are also due to the commissioned in 2016.
The 600MW Karuma Hydro Power Plant should be commissioned in 2018.
When all of them feed the national electricity grid, and the money that might have been borrowed to fund their construction has been paid off, end-user tariffs could reducefrom an average of $10 cents to $4 cents.
The Daily Monitor could not establish if Uganda Electricity Transmission Company Limited, which buys ‘bulk electricity’ from the generation companies, and sells it to distribution companies, has concluded a Power Purchase Agreement with Jacobsen.