The government has created the Uganda Energy Credit Capitalisation Company (UECCC) to enhance the flow of financing towards private sector-led renewable energy.
The government hopes that with UECCC now formed, it will attract private sector investments in renewable energy generations through which it hopes to achieve its ambitious plan of attaining 3,800MW by 2016.
The company will serve as a credit support institution providing financial, technical and other support to renewable and rural electrification projects in the country.
It is also expected to offer credit to financial institutions for onward lending to such projects in an effort to introduce into the financial markets new financing modalities, including credit enhancement instruments directed at reducing real or perceived risks faced by primary lenders and other financial institutions.
While announcing the launch on Tuesday, Ms Specioza Kimera Ndagire, the UECCC general manager, said the government came up with the initiative after realising that private investors in the energy sector face many bottlenecks prohibiting the growth of renewable energy investments, which need government support.
“Our mandate is to ensure that the financing for the entire project is available at all times right from the conception of the project idea till implementation. We shall not manage the project that is why we are partnering with micro-finance institutions,” she said adding: “The government has already worked out standardised tarrifs and power purchase agreements with relevant offices.
The launch of the company this week Thursday, will complete the liberalisation process of the energy sector, which the government started in the 90s. Some of the private companies currently supplying power to the government include Kakira Sugar works, Sugar Corporation of Uganda and Aggreko.