Power Africa Uganda Electricity Supply Accelerator (PAUESA)
Uganda, commonly known as the “Pearl of Africa”, is recognized in sub-Saharan Africa for its electricity regulatory framework and encouraging private investment in the electricity sector. Despite these positive features, in 2016, only 22% of the population enjoyed access to electricity in Uganda, with only 11% of the rural population having access to power.
To help the Government of Uganda address these limitations, USAID and Power Africa initiated a three-year activity in 2017, the Power Africa Uganda Electricity Supply Accelerator (the Activity) to support the Government of Uganda’s efforts to accelerate investments in cleaner energy. ESG managed the Activity which focused on providing transaction advisory services and technical assistance to enhance the enabling environment for energy, reduce sector risks, and mobilize resources to help increase power generation capacity and expand electricity access among both rural and urban communities.
To support the Activity’s goal of facilitating an increase of power generation and electricity access among rural and urban communities in Uganda, the Power Africa Uganda Accelerator aimed to achieve the following outcomes:
- Accelerate transactions of 250 MW of new power generation capacity.
- Increase electricity access to 1,000,000 new residential and business connections (500,000 on-grid connections and 500,000 off-grid).
- Enhance the enabling environment for power sector investment through improved capacity of government agencies, assistance to local and regional financial institutions, and support to private sector entities to attract and accelerate investments.
Lead by ESG, the following results were accomplished:
- Accelerating Off Grid Access: The Power Africa Uganda Accelerator, working with Power Africa and USAID, designed a wide range of top down and bottom up solutions to strengthen the solar sector, build capacity in private sector solar firms, improve customer knowledge of solar companies and solar products, and improve access to financing. The result in three years was impressive: a total of 587,581 off-grid solar systems were sold providing energy access to more than 2.5 million Ugandans.
- Policy Implementation and Leveraging Funding for the Rural Energy Agency (REA): USAID and Power Africa, through the Power Africa Uganda Accelerator, provided the Government of Uganda with resources and know-how to scale the Electricity Connection Policy (ECP), a program providing subsidized on-grid electrical connections. Embedding advisors in REA to accelerate the procurement of thousands of poles, meters, and ready boards, USAID and Power Africa provided critical logistical assistance to REA. Power Africa also developed business systems to help REA manage and track the hundreds of thousands of new connections made possible by the ECP. The Activity helped REA leverage over $50 million in donor funding while constructing more than 2300 kilometers of distribution lines.
- Improving On-Grid Access through Public Awareness: Convincing ordinary Ugandans to access the benefits of the free ECP was another critical obstacle – and the success of the policy depended on it. Through REA, the Power Africa Uganda Accelerator created and initiated a public awareness campaign to increase ECP participation. The messages were simple and effective: Electricity will benefit you and your family. The free connection policy means electricity for all Ugandans. Funding from the Power Africa Uganda Accelerator enabled REA to promote the benefits of the ECP through targeted television campaigns and focused advertising in newspapers, radio, and billboards. As a result, the Activity added over 281,000 new customers to the grid, allowing more than 1,338,350 Ugandans to enjoy the benefits of grid connected electricity.
- Accelerating Energy Transactions: The life cycle of project development for energy generation under the existing regulatory process typically takes 4 – 5 years (or more) to move projects through the development stages and reach financial close. The Activity identified over fifty generation projects that could be assisted, totaling over 1500 MW of power for Uganda. From 2017 – 2020, the Power Africa Uganda Accelerator directly supported a portfolio of 44 generation projects in Uganda, totaling 1,398 MW. During this period, the Activity was able to accelerate 11 projects, with over 250 MW capacity to move closer to financial closure.