Govt plans Shs70b pay-out for Eskom

The Ministry of Energy is seeking Shs70.8b as pay-out for Eskom Uganda Ltd when its concessions for operating both Nalubaale and Kiira power dams expire on March 31.
Another Shs26.4b has been budgeted as start-up capital for Uganda Electricity Generation Company Ltd (UEGCL) to take over operations of the two dams from Eskom.

While tabling the supplementary budget requests before the parliamentary natural resources committee yesterday, the Energy Minister, Ms Ruth Nankabirwa, said: “You know we are doing this because the concession for Eskom is ending at the end of this month and we don’t want a scenario where there is no figure on which to act. That is why we are asking for this money and the auditor general will carry out an audit and present the figures which will be scrutinised and payment made.”
The takeover of Nalubaale is part of the wide-ranging second-generation electricity sub-sector reforms borne out of the Electricity (amendment) Act 2022, through which the government is also nursing the idea of not renewing the Umeme concession in May 2025.

Nalubaale Dam, formerly known as Owen Falls Dam, is one of legacy projects of the British colonial administration commissioned 68 years ago.  The 150MW dam remained Uganda’s only hydro-power station until 1993 when construction of the 200MW Kiira Hydro-power Station commenced and was completed in 2003.
“The final audit/evaluation report will be issued by the office of Auditor General on March 25, 2023, and all stakeholders will be invited to review it prior to the end of the concession on March 31, 2023. This implies that by the end of March 2023, the government of Uganda will be in a position to partially pay off Eskom in accordance with the agreement,” she said.

Ms Nankabirwa also defended the Shs155.6b supplementary requests for the Petroleum Authority of Uganda (PAU), the oil sector regulator, to implement a number of activities including ICT infrastructure, monitoring of oil activities, advisory services, and other activities. 
However, out of the required amount, the Ministry of Finance has made provision of only Shs117b as a supplementary budget, leaving a deficit of Shs49.5b.
Of the total budget, the ministry will receive Shs106.1b, while PAU will get Shs11b, bringing the total budget to Shs117b. 

The Shs106.1b request also includes Shs57.6b as out of court settlement Albatross Limited that was contracted to do a feasibility studies for development of 50MW thermal power plant in Albertine Graben, and Shs784.8m for wage shortfalls that emanated from the enhancement of salaries for scientists.