World Bank Supports Renewable Energy Program in Uganda

The World Bank will support a US$111 million project to develop renewable energy sources in Uganda.

WASHINGTON, DC 2002-02-18 [] The ‘Energy for Rural Transformation’ project is a long-term program to develop rural energy and information technologies in the African nation. The objective of the first phase is to develop a capacity and a conducive environment for the delivery of rural and renewable energy technologies. The project involves four components, of which one involves expansion of the main power grid to non-served regions and to provide Global Environment Facility (GEF) grants for qualifying renewable energy investments. Another component will involve the sale and installation by private companies of PV products, including after-sales service and will finance GEF grants for installing solar PV systems in homes, public health, educational and water institutions. Total commitments from World Bank agencies is US$99 million, while the total project cost is US$111 million. The project received approval in December and will be completed in 2006. Eighty-five percent of Uganda lives in isolated regions and growth prospects in rural areas are constrained by a lack of energy and information technology. Government efforts to electrify rural areas has been “generally unsuccessful in sub-Saharan Africa” and must be replaced by private-sector commercially-oriented programs, says the World Bank document on the project. Targeted subsidies must consider affordability and equity issues and to allow investment decisions to be made on a commercial basis. “Uganda is well-endowed with renewable energy resources, whose development would contribute to environmental protection as well as rural transformation, but little progress has been made so far in utilizing them, with the exception of large-scale hydroelectric generation on the Nile River,” according to the document. “The global purpose of the proposed long-term program is to contribute to global environment protection by reducing greenhouse gas emissions; it is expected that the development of renewable energy would also make a significant contribution to rural transformation.” Other tasks related to renewable energy include the establishment of the contractual framework and rules for wheeling power over the main grid by third parties and the preparation of a “renewable energy resource information collection and dissemination system that provides reliable data that enables interested private sector investors to initiate their own assessment of potential projects,” the document notes. There will also be activities to reduce the gap in the price and quality of solar PV products. The potential renewable energy resources in Uganda include power generation from biomass residues, small hydro, wind, geothermal and solar energy for stand-alone PV systems. The prospects of utilizing solar energy have been given a boost by the ongoing UNDP-GEF Uganda Pilot Project for Photovoltaic Rural Electrification.
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