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Uganda Launches Sophisticated Feed-in Tariff Program

Last week it was Turkey. No newcomer to the concept, Turkey revised their program, expanding it modestly, and added a new twist with bonus payments for "Made in Turkey" products.

This week it is the US's former military foe, Vietnam, that dipped its toe into the feed-in tariff waters by announcing a draft proposal.

But it is Uganda that will set heads spinning this week. Quietly, without fanfare, Uganda has announced one of the most sophisticated, if not the most sophisticated program in Africa.

Vietnam

Vietnam's program is il-defined and limited, providing a tariff only for wind energy. Further, the tariff is supplemented by a government subsidy, presumably paid by taxpayers in the communist country.

Uganda 

Of particular interest are the highly differentiated tariffs for hydro projects from one to eight megawatts. The tariffs are in fact linear but presented in tabular form in increments of 100 kW.

Further, the Uganda program specifies capacity caps for each technology by year. This is clear policy guidance on how much the country wants of which technology.

  • Project size cap: <20 MW
  • Inflation adjustment based on O&M costs of tariff
  • Administered by Uganda's Electric Regulatory Authority (ERA)
  • Tariffs based on the cost of generation plus profit
  • Hydro tariffs differentiated by size in 100 kW increments
  • Tariffs for eight different technologies, including geothermal
  • Program capacity caps by technology and by year
In addition, Vietnam will also provide preferential loans and tax abatement for selected projects. Ugandans have quietly launched a program they simply call a Renewable Energy Feed-in Tariff (REFIT). Uganda follows South Africa and Algeria with early feed-in tariff programs. However, Uganda appears to have learned lessons from other programs worldwide. The Uganda program offers tariffs for a full suite of technologies, including geothermal and bagasse, detailed hydro tariffs, as well as technolog specific program caps.
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