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Srep Investment Plan for Uganda Proposed Decision SREP/SC.14/8 October 20, 2015 Meeting of the SREP Sub-Committee Washington D.C. Wednesday, November 11, 2015 Agenda Item 7 SREP INVESTMENT PLAN FOR UGANDA PROPOSED DECISION The SREP Sub-Committee, having reviewed document SREP/SC.14/8, SREP Investment Plan for Uganda, a) endorses the investment plan as a basis for the further development of the projects and programs foreseen in the plan and takes note of the request for USD 50 million in SREP funding.1 The Sub-Committee requests the Government of Uganda, in the further development of the proposed projects and programs, to take into account comments made at the meeting and any additional written comments submitted by Sub-Committee members by November 27, 2015, and to respond in writing to questions raised during the meeting and in subsequent written comments; b) reaffirms that all allocation amounts are indicative for planning purposes and that approval of funding will be on the basis of high quality investment plans and projects; c) approves USD 2.3 million as preparation grant for the project entitled, Decentralized Renewables Development Program (AfDB); d) approves USD 1.875 million as preparation grant for the project entitled, Wind Resource Map and Pilot-Wind Power Development Project (AfDB); e) takes note of the estimated budget of USD 420,000 for MDB project preparation and supervision services for the project entitled, Uganda: 130 MW Geothermal Development Program (AfDB), and approves USD 210,000 as a first tranche of funding for such services; f) takes note of the estimated budget of USD 150,000 for MDB project preparation and supervision services for the project entitled, Decentralized Renewables Development Program (AfDB), and approves USD 75,000 as a first tranche of funding for such services; and g) takes note of the estimated budget of USD 150,000 for MDB project preparation and supervision services for the project entitled, Wind Resource Map and Pilot-Wind Power Development Program (AfDB), and approves USD 75,000 as a first tranche of funding for such services. 1 USD 300,000 in SREP funding has already been approved for the development of the investment plan. TELEGRAMS: ENERMIN TELEPHONE: 230243,235895,230926 MINISTRY OF ENERGY AND GENERAL LINE: 234733/257863/349010 MINERAL DEVELOPMENT FAX: 230220/234732/ 349342 E-MAIL: [email protected] P. O. BOX 7270, IN ANY CORRESPONDENCE ON KAMPALA. THIS SUBJECT PLEASE QUOTE NO ADM/273/01 THE REPUBLIC OF UGANDA 16th October 2015 Mafalda Duarte Climate Investment Funds, Project Manager, CIF Administrative Unit Washington D. C. SUBMISSION OF UGANDAS SREP INVESTMENT PLAN I wish to submit for the consideration of the Climate investment Fund the Investment Plan for Scaling up Renewable Energy in Uganda. The Government of Uganda greatly appreciates the support provided by the CIF Administrative Unit as well as the Multilateral Development Banks in the Development of the SREP Investment Plan for Uganda. I hope the SREP subcommittee will endorse the Investment Plan so that additional energy is provided for the social economic development of Uganda. Uganda has priotised the development of the energy sector realising that energy is the driver of social economic development. The country’s development is guided by ‘’Vision 2040 for Uganda’’ which provides the development path and strategies to operationalise Uganda’s vision of becoming a modern and Prosperous country within 30 years. To realise this vision we shall need adequate and reliable energy. This Investment Plan for Scaling up Renewable Energy is therefore a critical step towards achieving our vision. The implementation of the Investment Plan will assist the Government of Uganda in meeting the country’s targets set in the Uganda’s Vision 2040 as well as contribute to meeting the targets set in our SE4ALL Action Agenda 2015. We believe the SREP support will be instrumental in helping to catalyze investment in projects of Geothermal Development, Solar PV Off-grid rural electrification, Solar PV On-grid Net Metering and in the development of wind mills. We look forwards to the support of SREP for this Investment Plan and to working with CIF and the Multilateral Development Banks to implement the projects outlined in the Investment Plan. James Baanabe FOR: PERMANENT SECRETARY 0A 0B © Nattanan726 | Fotolia © Atm2003 | Fotolia © Daniel Loncarevic | Fotolia © Dancorbould | Fotolia Design: Mounir BEN AMMAR Contents Acronyms v Map of Uganda vii Foreword viii Executive Summary 2 Introduction 2 Energy Sector 3 Renewable Energy 3 Constraints to Renewable Energy Deployment 4 SREP Program Description 5 Expected Impacts of SREP 5 Conclusions 6 Section 1 Country Context 8 Introduction 8 Section 2 Energy Sector 10 Overview 10 Electricity Supply and Demand 12 Electricity Generation 14 Electricity Transmission and Distribution Network 17 Electricity Tariffs 19 Electricity Feed-in Tariffs 21 Rural Electrification 24 Gender Inclusiveness in the Energy Sector 27 Section 3 National Energy Policy and Institutional Framework 29 National Policy and Vision 29 Energy Policy and Strategy Framework 30 SE4All 31 Institutional Framework 32 National Institutions 34 Role of Private Sector 35 Role of Development Partners 36 Role of Financial Sector in Financing Renewables 38 Section 4 Renewable Energy Sector 39 Renewable Energy Potential: Overview of Issues 39 i Legal and Regulatory Framework for the Promotion of Renewables 44 Matrix of Barriers to the Development of Renewables and Mitigation Measures 44 Section 5 Contribution of SREP to National Energy Roadmap 46 Section 6 Prioritization of Strategic Investment Areas 50 Priority Areas and Projects 52 Section 7 Program Description 53 Objectives of the SREP Program 53 Expected Impacts of SREP program 54 SREP Program Description 54 Section 8 Program Implementation Arrangement 57 Overall Supervising Entity and Implementing Entities and their roles 57 Organigram of Implementation Structure 58 Section 9 SREP Co-Benefits 59 Section 10 Financing Plan 61 Section 11 Environmental and Social Aspects 63 Environmental and Social Management Framework 64 Components of the Environment and Social Management Framework 64 Stakeholder Consultations 65 Responsibilities 65 Anticipated Environmental and Social Impacts 67 Section 12 Monitoring and Evaluation 69 General Features of the M&E System 69 Results Framework 70 Responsibilities and Monitoring and Evaluation Related Tasks 70 Managing Knowledge and Sharing Lessons Learnt 72 Section 13 Risk Assessment 73 ii Annex 1 Project Investment Concept Notes 77 Project 1: 130MW Geothermal Development Program 77 Project 2: Decentralized Renewables Development Program 85 Project 3: Wind Resource Map and Pilot Wind Power Development Program 94 Annex 2 Assessment of Country's Absorptive Capacity 100 Annex 3 Stakeholders Consultations 104 Annex 4 Rationale for SREP Ranking and Prioritization 114 Annex 5 External Consultations 118 Tables Table 1: Uganda's Energy Balance 13 Table 2: Distribution of Electricity Generation Sources 13 Table 3: Installed Electricity Generation Capacity as of 2014 15 Table 4: UETCL Transmission losses 2007-2014 18 Table 5: Ongoing Interconnection Projects 18 Table 6: Weighted Average Generation Tariff 20 Table 7: Electricity Tariffs per Categories 21 Table 8: Feed-in-Tariffs applicable for 2013 - 2016 22 Table 9: GETFIT Premium Payments under First Request for Proposals 23 Table 10: GETFIT Installed Capacities by Technology 23 Table 11: SE4ALL Uganda Goals with Set Targets 31 Table 12: Barriers and Measures Taken 45 Table 13: Scoring Summary 51 Table 14: Financial Plan 62 Table 15: Anticipated Environmental and Social Impacts 67 Table 16: SREP Results Framework 71 Table 17: Main Risks and Proposed Mitigation Measures 73 iii Figures Figure 1: Planned Generation Projections in MW (2015-2020) 16 Figure 2: Demand Supply Balance (source UETCL) 17 Figure 3: Uganda Transmission and Distribution Infrastructure 19 Figure 4: organigram of the the electricity supply industry change a The structure of MEMD 33 Figure 5: Least Cost Generation Development Plan 48 Figure 6: Projected Generations by Technology in MW (2015 – 2023) 49 Box Box 1: Lessons learnt from RESP 2001-2010 26 iv Acronyms AfDB African Development Bank NEMA National Environment Management Authority BST Bulk Supply Tariff NGO Non-Governmental Organization CIF Climate Investment Funds MoWE Ministry of Water & Environment ERA Electricity Regulatory O&M Operation & Maintenance Authority ERT Energy for Rural PACMECS Pader Abim Community Transformation Multipurpose Electricity Cooperative Society EU European Union PPA Power Purchase Agreement GDP Gross Domestic Product PPP Public-Private Partnership GET FiT Global Energy Transfer for PREEEP Promotion of Renewable Feed-in-Tariffs Energy and Energy Efficiency Program GHG Greenhouse Gas PRG Partial Risk Guarantee GIZ Deutsche Gesellschaft PSC Project Steering fur Internationale Committee Zusammenarbeit GoU Government of Uganda PV Photo Voltaic GRD Geothermal Resource R&D Research and Development Department HPP Hydro Power Project RAP Resettlement Action Plan ICEIDA Icelandic International RE Renewable Energy Development Agency ICS Institutional Cook Stoves REA Rural Electrification Agency IFC International Finance REB Rural Electrification Board Corporation IP Investment Plan REF Rural Electrification Fund IPP Independent Power REFiT Renewable Energy Feed in Producer Tariff JICA Japan International RESP Rural Electrification Cooperation Agency Strategy & Plan KfW Kreditanstalt für RETF Rural Electrification Trust Wiederaufbau
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