About the hybrid electricity customer connection credit

On December 13 2022, the Minister of Energy and Mineral Development, Ruth Nankabirwa Ssentamu, on behalf of the Uganda Government, launched the Hybrid Electricity Customer Connection Credit Framework to support Uganda’s quest of increasing access to modern, affordable and reliable electricity.

The Government  recognizes that electricity is a crucial enabler for the country to attain middle-income status.

The 2019 survey conducted by the Uganda Bureau of Statistics indicates that Uganda’s access to electricity is still low and identified the initial connection costs and lack of incentives to electricity distribution companies to make timely and cost-affordable connections as the significant impediments to access to electricity by Ugandans.

In the past, and in a bid to increase access to electricity, the Government subsidized the connection costs, which it later discontinued, pushing the connection cost higher.

Government, among several programs aimed at deepening access to electricity recently packaged and introduced the Hybrid Electricity Customer Connection Credit Framework. The principal aim of introducing and launching the Framework is to address issues leading to low access to electricity, particularly the initial connection costs.

The framework has been proven to be one of the most sustainable customer connection schemes, as it combines input from the Government, the electricity consumer, and the development partners, remarkably reducing the burden on those interested in being connected to electricity.

The Hybrid Electricity Customer Connection Credit Framework works in such a way that it combines a down payment of Shs200,000 by the electricity consumer, a subsidy of Shs250,883 by the Government of Uganda sponsored by the Global Energy Alliance for People and Planet (GEAPP) with their anchor partner, the Rockefeller Foundation, and a credit line of UGX 270,000 by the Uganda Development Bank (UDB) payable through a 15 percent deduction off a customer’s energy purchases over eight  years.

This implies that Ugandans requiring a no-pole service can connect to electricity for as low as Shs.470,000, from Shs720,883 upon payment of the internal wiring inspection fee. The scheme allows the electricity customer to either pay a lump sum of Shs 470,000 or make a down payment of Shs 200,000 and access the credit line of Shs 270,000 payable over eight years to get connected to power.

Electricity consumers are not required to apply to UDB directly for the connection credit facility. They need to apply to the electricity distribution companies expressing interest in connecting to electricity under the scheme. The scheme is implemented on a pilot basis under Umeme Limited and the Uganda Electricity Distribution Company Limited (UEDCL) concessions.

The Hybrid Customer Connection Framework comes in as a way of solving the problem of a backlog of 200,000 electricity consumers not connected to electricity under the Electricity Connection Policy and the new no-pole service applications received by the electricity utility providers.

It, however, does not exclude electricity consumers who had applied under the Electricity Connection Policy, provided they can afford to make a down payment of Shs 200,000.

It should, however, be noted that the Government is still implementing projects such as the “GET ACCESS” Project supported by KFW and the World Bank, among other electrification projects, to accelerate access to electricity by Ugandans.

Ms Stellah Nakibuuka is Communication Officer at the Electricity Regulatory Authority.