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Germany, EU provide Uganda Shs136bn for solar mini-grids

Kampala, Uganda | THE INDEPENDENT | The German Government and the European Union (EU) on Dec.13 launched the ‘GET ACCESS Mini-grid Solar Program, a 35 million euro initiative to support the electrification of Uganda’s rural areas and contribute to the transition towards renewable energy.

The program will provide first-time access to modern, affordable and clean electricity to over 110, 000 people, 800 public institutions (schools, health centres and others) and at least 700 businesses in remote rural areas.

This new initiative is expected to catalyse private funds into the development, construction, operation and maintenance of 120+ solar-powered mini-grids ensuring a 24h/7d reliable electricity service. The mini-grids installed will approximately add 5-6 megawatts of generation capacity to the country.

With a contribution from the German Federal Ministry for Economic Cooperation (BMZ) of 15 million euros and the EU contributing 10 million euros, the total project cost will be 35 million euros (Shs136.2 billion).

Both the Ugandan government and the private investors

will contribute to cover the remaining 10 million euros. The funds will be managed by the German Development Bank (KfW). The Ministry of Energy and Mineral Development (MEMD) will be responsible for the programme implementation in collaboration with the Ugandan Electricity Regulatory Authority (ERA).

The program will be implemented through a competitive tendering process whereby mini-grid developer companies, with demonstrable technical and financial capacities, offering the least cost energy are selected. To ensure the necessary scale for financial leverage, operation and commercial sustainability, the GET ACCESS-supported mini-grids will be grouped into up to five (5) clusters across Uganda. These include the village clusters of Palorinya–Maaji (West Nile refugee settlement), Kalangala and Wakiso (Central Uganda), Buvuma Island (East & West) and Lake Albert Shores.

The tendering process shall begin in 2023 and the construction of the mini-grids shall start by 2024. The program will support selected private companies with a unique combination of upfront and results-based subsidies that will reimburse mini-grid developers for significant portions of capital expenditures and costs to stimulate the productive use of energy (PUE).

This new initiative builds on previous pilot projects supporting the deployment of off-grid technologies and on the recently gazetted Isolated Grid System regulatory framework and its associated guidelines.

In addition, the program will also create a market for private sector-driven & financed mini-grid electrification as a viable & ready alternative to publicly financed grid electrification in remote locations.

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