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Report of the Committee on National Economy on the Finance the I(Ampala Metropolitan Transmission System 11

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Report of the Committee on National Economy on the Finance the I(Ampala Metropolitan Transmission System 11 PARLIAMENT OF UGANDA rt I Its PAHt JAMI-N I ()F IHF Rl-l'Ulll lC ()F lr('Al.ll)A o REPORT OF THE COMMITTEE ON NATIONAL ECONOMY ON THE pRoposAL By GoVERNMENT TO BORROW UP TO JPY 13.6598N (US$ 125.1M1 FROM JAPAN TNTERNATTONAL COOPERATTON AGENCY (JrCAl TO FINANCE THE I(AMPALA METROPOLITAN TRANSMISSION SYSTEM IMPROVEMENT PROJECT. a G/ \ NW MARCH 2018 11,'- yA 'tL lA ffi\ 1.O Introduction Rt. Hon. Speaker, Hon. Members, the Committee on National Economy considered the request by Government to borrow JPY 13.659 billion (US$125.1M) from the .Iapan International Cooperation Agency (JICA) to finance the Kampala Mctropolitan Transmission System Improvement Project in accordance with Rule 175 (2) (b) of the Parliamentary Rules of Procedure. The request was presented to this House by the Hon. Minister of Finance, Planning and Economic Development on 9.5.2O17 and was accordingly referred to the Committee on National Economy for consideration. o The Committee considered and scrutinized the rcquest and now begs to report. 2.O METHODOLOGY 2.L Meetings The Committee held meetings with the following: i. The Minister of Finance, Planning and Economic Development; ii. The Minister of Energy and Mineral Development; and iii. Uganda Electricity Transmission Company Limited. a 2.2 Documentary review The Committee studied and made reference to the following documents The Ministbr of Finance, Planning and Economic Development's brief on the loan request; 11 The Draft Loan Agrccmcnt bctween Japan International Cooperation (.llCA) and thc (iovernment of Uganda; 2l,P.a g e \/n-- # \$\ lll The minutes of the discussion on the preparatory survey on Greater Kampala Metropolitan Area Transmission Systems Project between UETCL and .JICA(.J ur-rc,20 1 6) ; IV The final report on the preparatory survey on Greater Kampala Metropolitan Area Transmission Systems Project (Septemeber,20 16) ; V The Final Environment Impact Assessment Report (July, 2016); VI Final Report of the Abbreviated Resettlcment Action Plan (July, 2076); and v1l The Projcct Implementation Plan (Ui)TCl,, April 2Ol7). 2.3 Field visits o The Committee conducted a field visit to some of the existing power substations in the Greater Kampala Metropolitan Area (GKMA) namely, Clock Tower, Kawanda and Mukono to acccss thcir cffcctivcncss in transmitting the current and future power required in GKMA in the medium to long term. 3.O BACKGROUND Uganda s National Development Plan (NDP) puts emphasis on sustainable economic growth while aiming at poverty reduction. Electricity serves as the vital engine for accelerating economic growth. Its peak demand in the country a presently stands at about 5O0MW, which is estimated to be doubled in coming 10 years. However, the country's power generation, transmission, and distribution capacity fails to meet the growing demand, which poses serious constraints on Uganda's economic activities. In rcsponse to thc incrcasing power demand, the Government of Uganda regards the improvemcnt of power generation an urgent issue. As a result, government has over the past decade been promoting the power generation development plan, such as hydropower, thermal and geothermal. On the other hand, the d t of transmission and distribution network is lagging @' behind and has continued to provide negative effects to the economic development, public adminislration and peoplc.'s hves in Kampala through the unstable power supply andlor frequent planned power outages. At present, there exists a 132kV transmission system ring in Kampala metropolitan area. However, from the power flow simulation and analysis conducted, considering the current growth rate, it was observed that the system will fundamentally lack capacity within thc medium term (10 to 15 years). Uganda Electricity Transmission Company Limited (UETCL) has incorporated The Kampala Metropolitan Transmission System Improvement Project in the o Grid Development Plan 2014 to 2030. The project aims at the effective use of 22O kV transmission lines for power supply to Kampala Metropolitan Area as well as improve the transmission capacity of 132kV Transmission lines and substations. The project shall meet part of the ener5/ needs of Uganda's population for social and economic development in an environmentally sustainable manner. It will also contribute to the reduction of the risk of scheduled power outage and stable power supply in the GKMA, thus the relevance of this project is considered to be high. 4.O THE PROJECT AND COUNTRY STRATEGY o The project is in line with the National Development Plan II, which is the national development policy of the Government of Uganda for the period 2OL6 - 2021. In the NDPII, "promotion of development of infrastructures" is one of critical areas of focus of thc Government in order to achieve the devclopment Soals-htglli ghted in thc plan O -.''t iNl /// \- v-aa-- ., /" ^0ft/ 4lPage A The project is also in line with the UETCL Grid Development Plan 2014-2030 in that highlights the mid- to long-term distribution facility plan for the entire country. The project will hence contribute to effective use of the hydroelectric power stations developed in conlormity with the cncrfX/ sector policy in order to supply power to the GKMA. 5.O PERFORMANCE OF ELECTRICITY TRANSMISSION PROJECTS There are 12 approved projects (lncluding Isimba and Karuma Hydropower Prr4ccts) that are dircctlf in-rplcmentcd by UtrTCL amounting to US$ 2.52 o billion, of which US$ 514.66 million has bccn disbursed representing a disbursement rate of 20.4oh as at 31"1 March,20 17. Howcvcr, this includes the Isimba and Karuma Hydropower Projects together with their associated transmission lines (Funded by China Exim Bank) that amounts to US$1.92 billion. The disbursement rates as at 31"t March,2OlT for Isimba HPP stood at 48.loh and that for Karuma HPP stood at 11.5%. In addition, there are 3 projects i.e. the Kampala - Entebbe power transmission line project funded by KFW from Germany, construction of 4 Industrial Parks Substations of Luzira, Mukono, Iganga and Namanve funded by China Exim Bank, and the Grid Expansion and Reinforcement Project funded by the World o Bank that had zero disburserncnts as at 31'1 Merrc.-h,2Oi7. The total amount committed for these 3 projects amount to USD$ 2O5.4 million. 6.0 PROJECT OBJECTIVE The objective of the Project is to improve transmission system in the Greater Kampala Metropolitan Arca (GKMA) through construction and renovation of substations, improvement o[ transmission lines and introduction of a mobile substation. This will contribute to the improvement of power supply and eao evelopment in GKMA. sl €Etsd* nt{/- tc\ 6.1 PROJECT SPECIFIC OBJECTIVES The project has the following specific objectives; i. To increase the existing transmission line capacity to deliver electricity to Kampala Metropolitan Arca, including the industrial park substations under construction (i.e. Mukono, Namanve and Luzira) and thc Standard Gauge Railway Traction Substations. ii. To provide adequate capacity and reliable supply to the Oil Pipeline terminal planned at Buloba. iii. To create substations that facilitate absorption of electricity generated at Karuma dam into Kampala Metropolitan Area grid. iv. To increase the Capacity of Bujagali Substation to take up o electricity generated at Isimba dam. v. To reconstruct and improve the capacity and reliability of Kawaala Substation. vi. To improvc thc rchability of Mutundwc Substation by upgrade to a double-busbar su bstation. vii. Procure a mobile substation for UETCL to improve emergency preparedness and minimize outage during maintenance of major substation equipment. 7.O PROJECT COMPONENTS Thcprolest has the following 7 components as sh<>wn in table 1; o CL a-' N4* a ry 6lP A \K$r Table 1: Project components No. Component Description Specification , 1 Buloba Substation 22O I 132 kV Transformer 125MVA X 2 Units 132 I 33 kV Transformer 40MVAX2Units 22O kV Switchgear 1 Lot 132 kV Switchgear 1 Lot 33 kV Switchgear 1 Lot Control building 1 Building 22okn Tran smission Line Approx 0.9 km x 4cct 1 32kv Transmission Line Approx 0.8 km x2cct 2 Upgrading of Mutundwe I 132k-.v Switch Gcar 1 Lot Substation J Bujagali Substatton 22olr32l33kv 250MVA X lUnit Trernsformer 1 Lot 22O kV Switchgear 1 Lot 132 kV Switchgear o 4 Construction of New 22Olr32l33kv 125MVA X 3 Units Mukono Substation Transformer 1 Lot t 22O kV Gas Insulated 1 Lot Switchgear 1 Building 132 kV Gas Insulated Approx 0.3 km x 2ccL Switchgear Approx 4.2 km x 4cct Control building Approx 0.4 km x 2cct 732kv Transmission Line 5 Upgrading of Kawaala 132133 kv Transformer 40MVA X 3 Units Substation | 132111 kv Transformer 20MVA X 1 Units 132 kV Gas Insulated 1 Lot , Switchgear 1 Lot 33 kV Switchgear 1 Lot 11 kV Switchgear i Building Control building 6 Reconductoring of Mukono Branch Point Approx 25.4 krn x lcct 132kv lines Mutundwe Substation Approx 10.2 km x 2cct o Lugogo Substation Approx 5.3 km x 2cct Kawala Substation Approx 0.1 km x2cct 7 Procurement of Mobilc Mobile Substation 2OMVA X 1 Unit Substation I Source: source: iroject Implementation Plan ltniCl, lprit ZOtz 8.O PROJECT COMPONENTS AND COST The total budgeted cost inclusive of taxes for the Kampala Metropolitan Project te) at USD 138.7 million project investment costs include: The 7 .r P, e ( I w r-)----- equrpment design, supply, ir-rsLerllation, testing, cLc; Project Management; RAP Implementation Supervision; Land Acquisition; Taxes; and Price Contingencies. Table 2: Project components by Cost Project Component Cost (USD million) Loan GoU Part Total Share "9"JmgI,g,t 19.5 19.5 14.loh Construction of New Buloba Substation 6.2 6.2 4.5.k Upgrading of Mutundwe Substatton 7.4 7.4 5.30k Upgrading of Bujagali Substatton Construction of New Mukono Substation 36.6 36.6 26.4Yo Upgradrng of Kawaala Substatron 22.1 22.1 15.9o/o a Procurement of Mobile Substation 3.9 3.9 2.80h Construction Supervisron (Consultancl ) 9.7 9.7 7 .Oo/.
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