Govt reduces industrial power tariffs

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What you need to know:

  • Electricity Regulatory Authority (Era) has been reviewing the electricity tariffs on a quarterly basis since 2014. 
  • In December 2021, it revealed that medium industries will pay Shs472 (down from Shs500.6). It also set tariffs for large industries at Shs355 for the next quarter ending March 2022. 

The  government has announced a power tariff reduction for industries from Shs283 (or eight US cents) to Shs176 (or five US cents) per kilowatt.
The Energy minister, Ms Ruth Nankabirwa, yesterday said the reduction is intended to bolster industrial production.
The development comes after government revealed that it is set to experience a revenue shortfall from power proceeds amounting to Shs160b. 

“President Museveni initiated a discussion with the industrialists that have for a long time complained about the high power tariffs that directly impact on the cost of production. The five US cents power reduction from the average eight US cents for industrialists begins this month,” Ms Nankabirwa told industrialists at the Liao Shen Industrial park (Namunkekera) in Nakaseke District.
Ms Nankabirwa tasked industrialists to use the low power tariffs to maximise production, build more factories, employ more Ugandans and have cheaper products for home consumption.
The Ministry of Energy has been tasked with monitoring the progress in industrial development to assess the impact of the power tariff reduction for industrialists. Ms Nankabirwa said the target is to enable Ugandan industrialists to produce on a massive scale so as to feed the regional markets. 

“You are already aware that the government entered a memorandum with the government of the DR Congo where Uganda will construct a road. This road will equally benefit the industrialists ready to export the surplus goods to DRC,” she added.
A detailed breakdown of the new power tariffs was not made available. 
Industrialists generally fall in three categories (medium, large and extra large industries). 
The Electricity Regulatory Authority (Era) will soon provide a detailed breakdown on the new power tariffs. But the Namunkekera-based industrialists—about 16 industries—have welcomed the idea.

“We have been in close contact with the government trying to find ways of having the high power tariffs that directly impact on the production costs reduced to at least 5 US cents. We pledge to utilise this opportunity,” Mr Zhang Hao, the managing director at the Liao Shen Industrial Park, said.

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