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Mbale City to Benefit from Shs 56 Billion Investment by Umeme

Electricity supply to Mbale City and surrounding areas will by end of this year, increase by 205% from the current 20 MW to 61 MW, thanks to a USD15.2 million (UGX55.7 billion) investment by Umeme Limited, Uganda’s largest power distributor.

Selestino Babungi, Umeme’s Managing Director, told the media on a tour of the company’s two flagship projects in the area that the power distributor was investing significantly in the area, in anticipation of demand growth emanating from increased industrialization and the recent city status of Mbale.

The two projects are the USD9.23 million (UGX34 billion) Siti 2 Project and the USD5.99 (UGX22 billion) Tangshan Mbale Industrial Park Project.

A bird’s eye view of the 16.5MW Siti 2 Hydro Power Dam developed by Elgon Hydro Siti (PVT) Ltd on River Siti in Bukwo District. Umeme is spending USD8.4 million on a 125-kilometre power line to evacuate power from the dam to Mbale. The project is 97 per cent complete.

The Siti 2 Project consists of a 125-kilometre 33kV single power line from the new 16.5 MW Siti 2 Hydro Power Project (HPP) on River Siti in Bukwo District as well as a switching station and plant house at Umeme’s Mbale existing sub-station. The project also includes the installation of six capacitor banks to stabilise power as well as wayleaves acquisition and the compensation of 3,242 project affected persons (PAPs).

“Works on the power line are 97 per cent complete, and the plant is ready to start generating power, “ Mr Babungi said, adding that works on the switching station and capacitor banks project was 74 per cent and 70 per cent complete respectively. Compensation of project affected persons is more than 96 per cent complete.

Umeme Managing Director, Selestino Babungi, briefs the media about the power distribution company’s USD15.2 million (UGX55.7 billion) investments to improve reliability and growing demand in the Mbale Umeme district. Mr Babungi said that the investment was to proactively meet anticipated growth in electricity demand, as well as support the government plan on industrialisation for jobs growth; import-substitution, and export promotion.

Eng. Job Watti, the Umeme Project Engineer, said that works on this phase, although delayed by COvid-19 and a number of other issues, was now slated for completion at the end of August.

Powering industrialization and creating jobs

The Tangshan Mbale Industrial Park Project on the other hand, involves a 75km Mbale-Tororo power line, that is expected to deliver an additional 25 MW from the Uganda Electricity Transmission Company Limited (UETCL) substation at Tororo to Mbale’s Sino-Uganda Mbale Industrial Park. Umeme will also construct a 10km distribution network within the industrial park. To further stabilise the power to industrial-grade quality Umeme is also building a switching station and plant house within the industrial park.

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This project that was commissioned on 7th May 2020 is due for completion by December 31st, 2020.

“The Mbale projects are one of our major investments for 2020 in support of government’s efforts to attract industries and jobs in the eastern region,” Babungi told the media, during the tour. “We expect demand in Mbale City and the surrounding areas to grow considerably fast. Current demand is about 20 MW but the industrial park alone is expected to consume 220 MW of power at full capacity. In addition to the industrial park, there is a cement factory in the pipeline in Mbale,” he said.

Currently, eight factories have been built in the 819-acre industrial park.

Dary Lee the park’s administrator, told media that out of the eight, four factories we already active, employing 1,500 Ugandans. The park is to host up to 80 factories at full capacity.

Over and above the 61 MW projected by the end of December 2020, additional capacity to the industrial park will come from a UETCL transmission sub-station planned for 2021.

Babungi said that Umeme had committed up to USD83.3 million (UGX310 billion) this year- a 7.2 per cent increase from the UGX289 billion it spent in 2019, to ramp up grid connections and improve power reliability. The UGX310 billion is being invested in six core areas, namely:

  • Addressing energy losses and improving operational efficiency at a cost of USD26.89 million;
  • Addressing load demand growth at a cost of USD22.72 million;
  • Improving power supply reliability at USD18.89 million;
  • Evacuation and supply of electricity from various generation facilities across the country at USD10.79 million;
  • Network systems automation at USD1.93 million and;
  • Network protection and security at USD2.06 million.

Babungi also said that priority was being given to industrial parks, in support of the government’s industrialization for jobs strategy.

“Industrial parks are the future of industrialisation in Uganda because they guarantee a lower cost of production per unit. The Mbale Industrial park particularly because of its proximity to the Kenyan border and subsequently the Mombasa Port, is strategic for both import substitution and export-based factories,” Babungi said during the tour.

Powering Uganda

Umeme, has to date invested more than $656 million into Uganda’s power distribution network, increasing the number of customers by 1,210,000 from the 290,000 it inherited in 2005 to now over 1,500,000 customers. The investments have also reduced power losses from 38% as of 2005 to 16.4% as of 2019.

In 2019 alone, Umeme connected 180,000 new customers, 178,152 of whom financed by the Government of Uganda and development partners under the Electricity Connections Policy.

Over the next five years, the company plans to spend a further USD450m (Shs1.7 trillion) in support of the government’s Electricity Connections Policy 2018-2027, which targets to increase access to electricity from the current 28 per cent to 60 per cent by 2027 and subsequently 80 per cent by 2040.

 

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