SEFA Funds preparation of first-ever Biomass Gasification Project in Uganda

15/12/2016
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The Sustainable Energy Fund for Africa (SEFA) approved on December 13 a US $993,000 grant to the Earth Energy Company Limited, a Ugandan firm, to prepare the first-ever biomass gasification project in the country, expected to add 20 Megawatts of baseload power to the national grid. Specifically, the grant will facilitate the conduct of preliminary studies needed for the project to kick off. These include a complete technical feasibility study, environmental and social impact assessment, a feed and detailed engineering design, as well as project management activities. This support is part of the African Development Bank’s (AfDB) efforts to scale up private investments in renewable energy.

“This grant will be instrumental in both the deployment of an innovative technology in an African context, but also in providing a clean energy alternative to a country highly dependent on hydropower such as Uganda. This is the sort of catalytic role and impact one expects from SEFA,” said Amadou Hott, AfDB’s Vice-President for Power, Energy, Climate and Green Growth.

Besides the sale of electricity to the national grid, this project is also expected to provide 15,000 farmers with an additional annual income of US $ 720 per person out of the sale of agricultural residue to project and is expected to create 6,000 new jobs in the outskirts of Gulu Town in Uganda, in plantation sites and operation of the power plant. Other environmental and social benefits of the project include preventing deforestation by making affordable biochar briquettes available to rural communities as an alternative to firewood, reducing air pollution, and empowering rural women.

The project is aligned with the Renewable Energy Policy for Uganda, in which Government of Uganda laid out its “Policy Vision” of increasing the use of modern RE from currently 4% to 61% by the end of 2017. The proposal is also fully aligned with the Bank’s strategies for promoting transition to clean energy sources and universal energy access, as well as rural development and job creation, in particular the Bank’s Strategy (2013-2022) and the New Deal on Energy for Africa strategy (2016-2025).

James Orima, the Earth Energy Company’s Chairman affirmed that “the funding from SEFA is not only a vote of confidence in the Ugandan energy sector, but also evidence of the commitment that the AfDB has to achieve universal access to energy in Africa by 2025. Earth Energy’s project is also a direct response to the government of Uganda’s strategic goal of diversifying the energy production mix.” He added: “Earth Energy’s biomass power plant will be the first and largest in East Africa, injecting extra needed power into the Ugandan grid leading to industrialization and thereby helping the country move closer to a middle-income status.”

Biomass fuel is a major source of energy in Sub-Saharan Africa accounting for about 80 percent of overall energy consumption, yet investment in biomass energy make up less than four percent. “The support to this private project can pave the way to scale-up of biomass technologies to meet the increasing energy demand on the continent,” said Hott.

About the Sustainable Energy for Africa (SEFA)

Launched in 2012, SEFA is a US $95-million multi-donor facility funded by the governments of Denmark, the United Kingdom, the United States and Italy. It supports the sustainable energy agenda in Africa through grants to facilitate the preparation of medium-scale renewable energy generation and energy efficiency projects; equity investments to bridge the financing gap for small- and medium-scale renewable energy generation projects; and support to the public sector to improve the enabling environment for private investments in sustainable energy. SEFA is hosted by the Energy, Environment and Climate Change Department of the AfDB.