Parliament clears $102m loans for electricity

Parliament clears $102m loans for electricity

Parliament has approved two Motions authorizing government to borrow up to US$102.88million intended for rural electrification projects.

Government will borrow US$91.5million from the International Development Association of the World Bank to finance the Grid Expansion and Reinforcement Project.

The project is intended to increase availability and efficiency of bulk electricity supply in Gulu, Nebbi and Arua districts, which will help in the evacuation of power from new generation sites such as Karuma and Isimba hydro power stations.

Government will also borrow another US$ 11.32million (Kuwait Dinars 3.5m) from the Kuwait Fund for Arab Economic Development to finance the construction of the 33KV and 11KV distribution project in six districts of; Kiryandongo, Kibaale, Nebbi, Bushenyi, Kasese and Rukungiri.

This project aims to further extend the rural power line coverage by construction of a 285 km network in the six districts. The project is also aimed at facilitating the implementation of the rural electrification programme, to increase access and unlock suppressed demand.

The project is in line with the country’s Vision 2040 and the National Development Plan, 2015/16 – 2019/2020 which identify the promotion of sustainable economic growth and improving the living standards of the population in the rural areas, by providing access to electricity through extending the interconnected electricity grid.

Legislators said that although generation, access and distribution of electricity were increasing, the cost of power and its installation remained prohibitive to the general population.

“We need to review the cost of power, considering that it’s of no benefit to have poles and power lines when the people cannot access and utilise the power,” said Hon. Helen Kahunde (Kiryandondo).

Hon. Nabilah Naggayi (Kampala) said that several consumers were willing to pay for power but were being frustrated by the UMEME, the service provider.

“It is very hard, expensive and difficult to access the Yaka pre-paid system. UMEME should not frustrate people who want to access this service,” she said.

Hon. Mbabali Muyanja (Bukoto South) said a lot of power was being lost due to illegal connections, now standing at 38%. The MP recommended that power be connected to houses on credit.

The Committee on National Economy noted a mismatch in the electricity transmission and distribution infrastructure necessary to evacuate the power and make it accessible to consumers.

It recommended that “government streamlines this mismatch between generation, transmission and distribution over the medium term in order to ensure that the medium target of 30 percent access to electricity is attained, but also ensure that all generated power is consumed.”

The Committee also recommended that government considers acquiring a central corridor for infrastructure projects to accommodate power lines, water pipes, communication infrastructure and road reserves, so as to reduce on repeated compensation whenever projects are implemented.

The Committee called upon the government steps up efforts to increase power supply which will gradually help to reduce energy prices to about 7 US cents/kilowatt/hr by 2017.

Source: Parliamentary News