Learning from Power Sector Reform: The Case of Uganda

Abstract

the Nalubaale and Kiira hydropower plants, Eskom Uganda was awarded a 20-year concession agreement for operations at both. In 2004, following extended negotiations; the Umeme 3 electricity distribution company signed a 20-year concession agreement to operate UEDCL's distribution network, with an effective commencement date of 2005. By 2006, most of the main reform measures had been completed and are still reflected in the structure of the power sector today. A summary of Uganda's main power sector institutions is presented in Box. 1.This case study sets out to explore Uganda's power sector reform experience by drilling down into the dynamics between sector development, performance, and key reform interventions. It departs from the premise that sector reform is a means to the end of improved sector performance, and examines to what extent different reform measures bore fruit in terms of power sector outcomes. As part of a wider global study of power sector reform, the primary objective of the paper is to draw lessons from Uganda's story that are of wider relevance to policy makers and reform practitioners, rather than to offer recommendations for Uganda itself. The paper is structured into two primary sections. The first provides a detailed, chronological account of the sector's institutional development and expeditious reform trajectory -and is seated within the broader political and economic history of Uganda. The second focuses on sector performance, probing links to institutional reforms, political economy dynamics, and macro-level structures and shocks in four areas: security of supply, access and accessibility, utility performance, and financial viability. Box. 1 Uganda's power sector institutions Ministry of Energy and Mineral Development (MEMD):The MEMD is the focal point for energy policy matters within the Ugandan government. For public or emergency power generation projects in the past, the MEMD acted as a procurement entity, either in its own right or through the sector's parastatals. Electricity Regulatory Authority (ERA):ERA's main responsibilities are licensing and setting electricity tariffs. ERA also defines and monitors technical standards within the sector and enforces adherence to the National Grid Code. It issues and monitors the licenses required to generate, transmit, and distribute power. ERA also sets and reviews feed-in tariffs for renewable energy (REFiT) generation projects between 1 and 20MW. Uganda Electricity Generation Company Ltd. (UEGCL):UEGCL is the holding company for state-owned generation assets. Its main roles are: to oversee the performance of Eskom Uganda and of the thermal plant at Namanve (50 MW); to negotiate and administer engineering, procurement, and construction contracts for government/ public projects as well as all Build Own Operate Transfer (BOOT) projects, namely IPPs; and to supervise the operations and maintenance of mid-tier public projects.Eskom Uganda Ltd.: Eskom Uganda is a subsidiary of South Africa's utility giant, Eskom Holdings. In 2003, Eskom Uganda w...

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