The government of Uganda has said that manufacturers in industrial parks will use electric power at a subsidised rate of 5 US Cents per KwH in six months.
This was revealed by the minister of Energy and Mineral Development, Ruth Nankabirwa, while meeting members of the Uganda Manufacturers Association last week.
Ms Nankabirwa said the 5 US cents, as directed by President Yoweri Museveni, will be realized through connecting power from the government generation plants directly to the industrial parks.
“We have successfully amended the electricity act of 1999 to provide for the purchase of power straight from the generation to manufacturers to reduce the end-user tariff for manufacturers starting with those in the proximity of the transmission infrastructure,” she said.
High power tariffs in Uganda have been a topical subject and the UMA has been at the forefront of lobbying the Government for lower electricity tariffs rates of at least 5 US cents per KWH.
With a lower tariff, the manufacturing sector which consumes about 70% of the electricity in Uganda will be able to favourably compete regionally and internationally.
Mr. Deo Kayemba, the vice chairman of the UMA, while giving his speech, commended the government initiative to invest in power generation.
This move, according to him, will enable further reduction in the cost of power to support economic activities as envisaged under NDP III through agro industrialization.
He noted that government is the largest single buyer with 65% of its budget being meant for procurement of goods and services.
The UMA Vice-chairman reiterated the need to foster a stronger partnership that shall promote local content mainstreaming within the Electricity Supply Industry (ESI) to support local manufacturers of Transformers, cables, Poles, Steel, Plastics, Uniforms, Cement, among others.
In her response, Nankabirwa assured manufacturers of the ministry’s total commitment to supporting local content especially for generation plants under construction, cable supplies to Umeme Ltd, the Rural Electrification Programme, and UEDCL – supply of locally available materials to generation plants under construction, cable and transformers to Umeme Ltd, Rural Electrification Programme, and UEDCL.
Ms Nankabirwa reported that her Ministry approved USD 11 million for the Jinja – Kayunga Industrial park, distribution investments, penalty framework for Umeme Ltd and UETCL.