Why Uganda’s energy transition still has a mountain to climb

He pledged to, among others, roll back air pollution regulations, end offshore projects, and electric cars asking once on campaign in Georgia in June that; “Does anybody want to drive for an hour and then wait four hours to get to recharge?”

During his first term in office, between 2017 and 2021, President Trump famously lampooned climate change as a ‘hoax’ invented by China and unplugged the US from the Paris Agreement, which strengthens global response on climate change, and generally folded hands on the subject paving way for China to take the lead in electric vehicles, solar modules, batteries, and other clean energy technologies.

The outgoing Biden administration fought hard to undo many Trump era policies and actions on climate change, including in 2022 enacting the Inflation Reduction Act, the most significant climate legislation in US history.

For the second term, it remains to be seen. But as some 66,000 delegates gathered in the Azerbaijan capital, Baku, mid-last month for the annual UN climate Conference of the Parties (COP) summit, the Trump shadow loomed large.

“As the world’s richest country and opinion leader in the same regard, Washington’s views on climate discourse cannot be discounted. So now imagine having someone not interested at all in charge—for another four years,” one official involved in top level COP29 negotiations told this publication.

Since 1992 when the United Nations Framework Convention on Climate Change (UNFCCC), the main international agreement on climate change,
was reached—as the precursor to the Kyoto Protocol in 1997 and the Paris Agreement signed in 2015—global consensus, on what needs to be done, has been knotty often constipating collaboration. Even more intricate is whenever the world’s key powers are reading from different scripts.

Tensions brewed even more at COP29 as the major polluters, the US and European Union (EU) states, skirted responsibility of pooling $1.3 trillion, for financing climate energy transitions of smaller economies, demanded by the G77+China bloc. At the end, $300b annually was pledged up from the previous goal of $100b without announcement of commitments on cutting greenhouse gas emissions nor a roadmap for fossil fuel transition.

During the last COP28 in Dubai, UAE, countries agreed on a “transition away” from fossil fuels, including oil and gas, and coal, which produce large quantities of carbon dioxide when burnt, which was expected to be expanded during this year’s summit. However, consensus fell apart at COP29 after Saudi Arabia declined to accede to any text “targeting specific sectors, including fossil fuels” in effect pushing further discussions to next year’s CO30 in Brazil.

With President Trump’s renascent and his Republican party controlling both chambers of Congress, the World awaits for a showdown not just on increasing oil and gas production but largely on climate action required to keep global surface temperature to well below 2C and ideally to 1.5C above pre industrial levels.

A just energy transition “I think COP29 was a disappointment, especially for low developed countries considering the amount of money that we expected to be committed to supporting climate financing. And again the $300b is still not sufficient—it is just a pledge—but most
importantly ensuring that financing is accessible in the context of Africa,” argued Winfred Ngabiirwe, the executive director of the NGO, Global Rights Alert.

She added: “In terms of [energy] transition, I think it is a tricky question for Uganda, which has since 2006 hoped to extract its oil and other fossil fuel resources. And then all of a sudden, but in the last couple of years, we have seen the cause for halting production of fossil fuels. And as a country that... Our plans have hinged so much in terms of what we're going to get from our oil, from our gas. It takes you back to ask yourself what is the alternative if you were to stop now.”

Energy transition refers to the world shifting from oil and gas, and coal, as key sources of energy to renewable energy sources like wind and solar, and other clean energy technologies. The debate on particularly phasing out oil and gas operations, which according to the Organisation for Economic Co-operation and Development, account for around 15 percent of total energy-related emissions globally, equivalent of 5.1 billion tonnes of greenhouse gas emissions, coincided with Uganda fast-tracking development of its $12b (Shs44trillion) oil project.

The $12b is capex for: $5b (Shs18.2trillion) for development of the proposed East African Crude Oil Pipeline (EACOP), $2b (Shs7trillion)
for Kingfisher project operated by Cnooc in Hoima and Kikuube districts, and $4b (Shs15trillion) for Tilenga project operated by TotalEnergies EP in Buliisa and Nwoya districts.

A seemingly well-coordinated campaign has since been mounted to scuttle development of the EACOP. The campaign co-coordinated by a network of local and international NGOs has dissuaded international financial institutions to shy away from investing in the project.

Key multilateral international financial institutions like the World Bank have since put brakes on financing fossil fuel projects around the globe. Even Chinese lenders are increasingly under pressure to distance from EACOP.

Mr Ali Ssekatawa, the director for legal and corporate affairs at the Petroleum Authority of Uganda (PAU), acknowledged that what is undeniable is that the world needs energy to transition from energy.

“So if the energy transition is going to take 40 years you need petroleum products to transition to whatever...OUR (Uganda oil) project is one of the aspects that will be needed during the transition. As simple as that. There is nothing coming tomorrow,” Mr Ssekatawa maintained.

He, further argued, that the Ugandan government is unrelenting in its quest to develop the oil project, which could ferry as much as $3b (Shs10trillion) annually during peak production, guided by an energy transition plan that was prepared after two years of studies internationally and locally looking at the requirements for next 30/40years.

“For you to stop using a computer you still need a computer. So if you are planning to stop using a laptop, that plan is on the laptop. So all we are saying is for us we shall use a laptop to help plan stopping using a laptop. That is why our energy plan projects is up to 2065,” he argued.

Africa has approximately 125.3 billion barrels of proven oil reserves, with Uganda ranking in the ninth position, although still a distance away from starting commercial production.

This, as the continent’s historical share of global emissions said to be below 3 percent, with an average carbon footprint per capita of 0.95 tCO2eq, well below the 2.0 tCO2eq required to achieve the target for net-zero transition.

The cold, hard reality 

A host of pundits opposed to the hurried energy transition have called for the contextualisation of the energy debate between rich and poor countries; the Global North and South.

Ms Ngabiirwe said: “What is causing climate change in Uganda as of today is deforestation majorly. And why are we having a lot of deforestation? Because over 94 percent of Ugandans depend on biomass, which means charcoal is firewood. So we are cutting down trees
at a very alarming rate so that we can cook. So deforestation as of today is a major issue. So if we are talking about...energy transiting, the priority would be that less people depend on forests, on cutting forests so that they can make money or can cook or can heat up. So what are we giving for that group? How we're going to enable an everyday woman to put food on the table without cutting a tree, without using charcoal, without using firewood. That is the starting question for Uganda's energy transition before we talk about energy companies visiting the country. So we need access to financing for the alternatives. If you are to use briquettes... How can an ordinary person buy them and from where? How many people are able to make briquettes?” 

A November 2023 report titled ‘Who Finances Energy Projects in Africa?’ by the Carnegie Endowment for International Peace documented while on average Africa received an average of $35b (Shs127trillion) annually for fossil fuel and clean energy projects over the past decade, which amount was enough to address the continent’s energy finance gap, unequal distribution has left many countries behind.

“Some inequity may be a consequence of differing domestic energy demands, investment environments, or natural resource endowments across
countries. However, the resulting distribution of energy finance over the past decade was such that many African countries—home to hundreds of millions of people—were left with substantial gaps in their financing necessities," the report reads in part.

Likewise, Uganda’s Energy Transition Plan (ETP), co-drawn by the Ministry of Energy and International Energy Agency, despite massive investments in the electricity subsector, electricity and clean cooking access rates remain low, at around 45 percent and 15 percent, respectively.

“To reach universal access to electricity by 2030, over 800 000 households would need to gain a connection each year to 2030. Kenya, Rwanda, Bangladesh and India have all achieved similar rates of progress in the past. For clean cooking, Uganda would need to deploy more than one million improved biomass or clean cooking stoves each year to reach its target, roughly 4% of the estimated global clean cook stove market today,” the ETP reads in part The report notes that even with Uganda’s efforts to peak domestic oil consumption in  2040,demand in the Greater Horn of Africa region remains higher than the region’s production.

“Through the development of the ETP, Uganda has set a target to reach net zero emissions in the energy sector by 2065. Continued electrification delivers around 40 percent of the energy sector emissions reductions needed to reach net zero after Uganda peaks
its emissions in 2040. The rest comes from switching to low emissions fuels in heavy industry, aviation and road freight, as well as introducing carbon capture, utilisation and storage. Global progress on commercialising such technologies and lowering their costs
would support Uganda’s adoption of these technologies, along with international climate financing and carbon credits,” the report details.
Phasing out the old,slow with the new Several pundits have opined that reaching net-zero fossil fuel emissions. 

In the case the ETP details that Uganda’s energy investments would have to increase to $8b (Shs29trilion) by the close of 2030, with $850m (Shs3.1trillion) required annually.

“Realising this sharp increase in investment requires concerted efforts to involve the private sector. Over the last decade, development finance institutions financed about 80 percent of Uganda’s power investments, much of this through concessional funding, compared to a mere 10 percent from the private sector. Innovative financing models and additional concessional finance can help, alongside greater involvement from domestic institutions, including pension funds. Diversifying funding sources is critical to scale investment, better balance risks, reduce public financial strain and maintain affordable energy services,” the report notes.

Mr Ssekatawa argued that the other flip is Uganda producing [oil] what is required to help with the transistion as opposed to merely consuming other people’s resources.

Secondly, you are transitioning from what to what; if you are using firewood....the first world has been using electricity, power generated industries...but now it’s going back to nature; but for us we are still there. So we are saying the nature of our transition is
different from one Silicon Valley which has been at it for 100 years. The nature of our transition is where we need to electrify each and every village. That’s not something someone in New York understands. So that’s how our energy transition is structured.”

Just like for electricity which partly remains inaccessible to many due to tariffs, clean cooking projects such as Liquefied Petroleum Gas (LPG) cylinders remain unaffordable or majority on the continent. As part of the oil project, the government and TotalEnergies EP plan to develop a $400m, (Shs1.4trillion) LPG plant to produce the estimated 600 billion standard cubic feet of gas associated with Uganda’s 6.5billion barrels of oil reserves.

The LPG project is part of the French oil giant’s plans to capture the imagination of energy transition enthusiasts. In 2020 the company changed name from Total to TotalEnergies, and in July this year announced acquiring a stake in the Bujagali hydro power plant, one of
the clean options.

Ms Ngabiire opined: “How many people are able to buy gas and refill the gas cylinders? I know that the government of Uganda gave out cylinders to selected communities. But you know that the return for refilling those cylinders was less than 20 percent. They distributed
the first time, but less than 20 percent of the people that received those cylinders went back for a refill. And we need to ask ourselves why. Is that they didn't know where to refill. Is it that they didn’t have the money for a refill, or it was not convenient for them to use in terms of where they are staying, in their houses, or just the understanding and appreciation?”

“I think there is a lot of work that needs to be done around that for that transition to be meaningful. Otherwise, the country has a plan. But we shouldn't just jump around because the world is asking us to have a plan as a country and then we start having things on the book that we're not going to implement,” she added.

But the devil is the detail. An August 2024 report titled ‘Out With the Old, Slow With the New’ by the International Institute for Sustainable Development, detailed while international public finance for fossil projects continued to decline, little of that money went to boost green energy in poorer countries.