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Electricity price reduced by Shs97/Unit.

Electricity price reduced by Shs97/Unit.

Tarrif cut to save customers shs 40billion, Energy Minister Ruth Nankabirwa (Courtesy photo)

Uganda’s energy landscape is undergoing significant changes in 2024, with the recent announcement of Annual Base Electricity End-User Tariffs for the First Quarter.

The Minister of Energy and Mineral Development, Hon. Dr. Ruth Nankabirwa Ssentamu, provided insights into the tariff determination process, key assumptions, and the implications for consumers. This delves into the details of the tariff review, sector transitions, and the broader initiatives shaping Uganda’s energy future.

2024 tariff review process

The tariff review process, mandated by the Electricity Act 1999 (As Amended), involved comprehensive assessments and public participation. The Uganda Electricity Regulatory Authority (ERA) received applications from key stakeholders, including Uganda Electricity Generation Company Limited (UEGCL), Uganda Electricity Transmission Company Limited (UETCL), Uganda Electricity Distribution Company Limited (UEDCL), and Umeme Limited. The transparency of the process was emphasized, adhering to the regulatory framework and inviting public input.

Key assumptions and considerations

The tariff determination considered various factors, including the expected commissioning of the Karuma Hydro Power Plant in 2024, preparatory activities for the transition of distribution networks, and the depreciation of the Uganda Shilling against the United States Dollar.

Additionally, projections for electricity demand growth, measures for tariff reduction for manufacturers, and a declining block tariff structure for different consumer categories were factored into the decision-making process.

Tariff reduction and initiatives

The Minister highlighted a 1.6% average annual tariff reduction compared to Q4 2023, translating to a substantial saving of UGX 40.321 billion for electricity consumers. Notably, the reduction focused on supporting small and medium industries, with additional initiatives for domestic and institutional cooking tariffs to encourage electricity usage. The efforts align with the government’s commitment to affordability and promoting economic development through a competitive industrial sector.

Sector updates and future projects

The Minister provided updates on the operationalization of the Electricity (Amendment) Act 2022, emphasizing benefits such as royalties for renewable energy generators and private investment in the transmission segment. Direct purchase of electricity and the ongoing development of net-metering regulations were also highlighted as key milestones. These initiatives are geared towards enhancing the sustainability and efficiency of the energy sector.

Accelerated access to electricity

To achieve the government’s goal of accelerating electricity access to 80% by 2027, several programs were unveiled, including the hybrid customer connection financing framework and the Energy Access Scale-up Project (EASP).

The EASP, supported by the World Bank, aims to connect over 1.3 million households, industrial parks, SMEs, refugees, and host communities, fostering inclusive economic development.

Sector transitions and expiring concessions

The Umeme concession is set to revert in April 2025, with preparations underway to ensure a seamless transition. The Minister also highlighted the importance of the Token Identifier Number (TID) transition, emphasizing the need for all prepaid meters to migrate to the new system by October 2024.

Uganda’s energy sector is evolving with a focus on affordability, sustainability, and increased access. The 2024 tariff review reflects a balanced approach to meet the diverse needs of consumers and support economic growth.

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