At its governing body meetings this week, the Climate Investment Funds (CIF) endorsed Uganda’s far-reaching Investment Plan (IP) to transform its energy sector by building on its renewables resources including wind, solar and geothermal, and expanding the spread of sustainable energy throughout the country.
The plan, to be implemented under the CIF’s Program for Scaling Up Renewable Energy in Low Income Countries (SREP), will focus on geothermal development, solar PV off-grid rural electrification and-grid net metering, and wind measurement for development of pilot wind power project. The plan will also promote and support greater private sector engagement in power generation from renewables, help consolidate the sector’s regulatory framework, and promote gender equality and inclusiveness. The IP will be implemented with support from the African Development Bank and other partners, including the International Finance Corporation (IFC) as advisor for geothermal, and was endorsed with an indicative infusion of $50 million.
Despite its high average annual growth rate of about 3.4%, access to electricity for Uganda’s 35 million citizens is only around 17%, one of the lowest in Africa, and the principal source of energy remains biomass. In recognition that energy is the driver of socio-economic development, Uganda designed the IP to build on the country’s policy infrastructure for sustainable energy envisioned in its Vision 2040 for Uganda, including increasing energy access to an ambitious 80% by 2040. Particularly for remote and isolated areas, where connectivity to the main grid is too expensive, off-grid and mini-grid systems will be an important part of the solution.
“Uganda has made a commitment to this investment plan because we recognize that energy is the engine of our growth. Because we have very low level of energy access, we are urgently addressing that problem as part of our vision for a prosperous Uganda. As our population grows and our citizens increasingly need basic energy, we also need to draw on our natural resources and to engage the private sector to ensure a sustainable energy base throughout our country,” stated M. James Baanabe, Uganda Commissioner from the Directorate of Energy Resources Development and SREP National Focal Point at the Ministry of Energy and Mineral Development. “We are pleased that this plan helps address both by building our renewables sector and engaging the private sector, and welcome today’s endorsement.”
The plan includes a set of three projects to be developed over the coming months:
- Decentralized Renewables Development Program
- Wind Resource Map and Pilot-Wind Power Development Project
- 130 MW Geothermal Development Program
Some expected results from the projects under the IP include:
- A minimum direct contribution of 151 MW of installed capacity of renewable technologies (non-hydro) in the country’s energy mix
- An increase in the annual energy output of 125.4 GWh per year
- An annual decrease in greenhouse gas emissions of 163,000 tons CO2 a year
- Total investment of at least $455 million in the power sector associated with SREP
- Development of two nascent generation technologies in the country, geothermal and wind, with high transformational impact
- Expansion of expertise and know-how in the country in relation to renewable technologies
- Better economic and social prospects in isolated areas that do not benefit from access to modern and productive energy services.
“With Uganda coming on board with their SREP plan, we are encouraged by the growing number of African countries which are joining the effort to green their economies with CIF support,” said Kurt Lonsway, AfDB’s Head of Environment and Climate Change Division and CIF coordinator. “Fourteen African nations are undertaking the difficult work to structure SREP investment plans and develop associated projects in order to help their economies grow with the support of renewable energy services. Uganda is helping lead the way in that effort, and the CIF endorsement of this investment plan is an important positive signal for Africa’s green growth.”
Earlier this year, Uganda also received an endorsement to create a CIF-supported investment plan under the CIF’s Forest Investment Program (FIP) to transform its forests and associated sectors; once the plan is developed with CIF and AfDB support, it will then be able to seek resources outside the CIF to fund projects under the plan.
About the Climate Investment Funds (CIF)
Established in 2008, as one of the largest fast-tracked climate financing instruments in the world, the $8.1 billion CIF provides developing countries with grants, concessional loans, risk mitigation instruments, and equity that leverage significant financing from the private sector, MDBs and other sources. Five MDBs – the African Development Bank (AfDB), Asian Development Bank (ADB), European Bank for Reconstruction and Development (EBRD), Inter-American Development Bank (IDB), and World Bank Group (WBG) – implement CIF-funded projects and programs.