The Government of Uganda through the Electricity Regulatory Authority (ERA) in August 2018 launched the Energy Rebate framework as part of the wider Government Plan to accelerate Electricity Access and Grow Demand.
The framework is designed to encourage consumer-funded line extensions and minimize delays that usually result from utility scheduling (and budgets) in response to customer requests by allowing consumers to privately invest in power line extension and receive compensation for approved investment in industrial power line extensions undertaken as part of the customer’s connection installations.
According to the Electricity Regulatory Authority, a number of local and international companies have already subscribed to the framework with over Shs 5.22 Billion invested in power line/grid extensions to their premises.
Some of the companies that have benefitted from the framework include ATC Uganda, Harris International, MS/Paper Toils, Raxio Data Center, and Thembo steel.
For an investment to qualify for the Energy Rebate Benefit, the infrastructure established should support the connection of other Customers. The investment made by the above companies will benefit hundreds of other local companies and hence improve industrialization in Uganda.
According to the Electricity Regulatory Authority, the Energy Rebate mechanism is benefiting industrial consumers in the categories of medium (Low Voltage 415V), large (High Voltage 11,000V) or 30,000V, with maximum demand exceeding 500kVA) and extra-large (High Voltage 11,000v or 30,000v, with a maximum demand exceeding 1,500kVA and dealing in manufacturing).
ERA notes that originally, industrialists who possessed the financial muscle to fund grid extensions to their premises would hesitate to invest because the burden was too big to bear but also because after financing the extension, other customers would access the electricity when the network was built without contributing to the initial cost incurred by the investor.
According to ERA, “Because of these challenges and more, a lot of businesses and good ideas would stay on paper. In some unfortunate cases, facilities have been established but businesses are delayed until electricity is enabled through scheduled grid extensions which sometimes take years. However with the energy rebate framework, businesses are able to have power connected whenever their business ideas are ready.”