Optimize tariff reduction to reach consumers across regions

The Uganda Electricity Generation Company Limited (UEGCL) recently revealed that unit five of the Karuma dam was successfully connected to the grid, which makes it the sixth unit to undergo all the operational tests for readiness. 

This came after the completion of the first unit trial run and grid connection tests that happened in March 2023. Karuma Hydroelectric Power Station is a 600mw power project under construction in Uganda which is going to be the largest power-generating installation in the country.

We also commend the government for launching the Shs2.4 trillion Electricity Access Scale up projects (EASP) aimed at extending and increasing energy access for households, enterprises, and institutions through grid and off-grid connections. It is believed that this project will address the challenge of surplus power that is not consumed but ends up being paid for by poor Ugandans.

The Uganda Energy Sector report that was launched by the International Energy Agency in 2023 to MEMD observed that Uganda has one of the lowest electrification rates in the world. This is partly contributed to by the high electricity connection costs and high power tariffs that cannot be afforded by the majority of Ugandans. Ensuring electricity access to over 40 million Ugandans is a critical national and regional objective to meet the SE4All agenda.

Although significant efforts have been made by the government for over the last 20 years, the electricity access rate has remained low to around 24 percent despite the surplus power in the country.

It is noted that in urban areas, 57.2 percent of Ugandans have access to electricity; however, access drops to 10 percent in rural areas, and it is only 22.1 percent nationwide meaning that over 94 percent of the population still depends on biomass to meet cooking energy needs whereas 73 percent rely on firewood and 24 percent on charcoal because the tariffs are too high for most potential customers. 

The connection of 600mw of power from the Karuma dam and the Electricity Access Scale up Project represents a significant increase in our power generation capacity and access, which naturally prompts questions regarding the anticipated reduction in electricity tariffs. The primary concern is whether the substantial increase in power generation capacity from the Karuma dam will indeed lead to a reduction in electricity tariffs for consumers nationwide. 

The government informed Ugandans that the Karuma tariff would be US Cent 4.97 per kWh unfortunately; the few Ugandans that are connected to the grid are still paying exorbitant tariffs that are not affordable. This expensive power may lead the country to the failure to achieve SDG 7 which calls for affordable and clean energy yet the country is producing surplus power including that from Karuma dam. 

Notably, because of the high power tariffs, Uganda’s remaining forests are being threatened as people search for firewood and charcoal for cooking. The power tariffs continue to be high despite the implementation of the 600mw Karuma power to the national grid and other electricity projects like EASP. Some people will still opt for biomass if the power tariffs are not reduced.

Therefore, it would be appreciated if the government could provide insights into the measures that have been put in place to ensure that the reduction in tariffs is implemented effectively and reaches consumers across various regions.  

The government also needs to invest that huge money in clean energy alternatives like solar energy, electrified pressure cookers, and biogas which is cheap for all kinds of people instead of investing it in those expensive power dams such as Karuma, Isimba, Bujagali, and many others hydropower dams that are going to benefit few Ugandans. 

Olive Atuhaire, Research Associate

[email protected]