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Can a new strategy redeem the rural electrification project?

Electricity lines bypass houses in Kumi

In the third and last part of these series, BENON HERBERT OLUKA looks forward to what the next 10-year phase of the rural electrification project promises to achieve and whether the government has put in place the requisite infrastructure to deliver on its promise.

 


For four years now, Godfrey Okello, a resident of Abim district in Karamoja, has lived within 300 metres of a grid electricity line but does not enjoy the utility which was threaded to the largely underdeveloped sub-region at great cost.

Okello, a member of the Abim district local council, says he applied for his house to get connected immediately authorities started receiving the applications – even before the rural electrification power lines had reached Abim. To this day, the wait continues.

“They have been telling us to wait. We have been waiting. We have even failed to understand what is happening,” laments Okello to The Observer.

At Abim town, where a few of the 70,000 residents have been able to tap hydro-electricity courtesy of available step-down transformers, a considerable number of electricity-inspired businesses have sprung up.

Though the town is still dusty due to lack of tarmac roads, electricity has led to the emergence of metal fabrication workshops, hair salons, entertainment outlets, refrigeration facilities in shops, as well as typing and photocopying services. The lines that run near Okello’s home are high-voltage lines, from which he cannot tap electricity directly.

Okello and his neighbours need a step-down transformer. Like the lines that snake their way across 2,337 square kilometres of Abim, this problem affects other trading centres in the north-east Uganda district.

“Some centres such as Kala Kala, Angwee, Otalabar and Kiru also have power lines nearby but they require transformers in order to get electricity,” says Okello.

The manager in charge of Energy for Rural Transformation at the Rural Electrification Agency (REA), Medard Muganzi, concedes that cases such as that of Okello are not unique. He attributes the delays to the attitudes of service providers, those private companies sub-contracted by the government to connect people to the grid.

“If we are to achieve the government targets for connections, then we must definitely strive to change this attitude of thinking that the customers should come to us rather than us going to customers,” he said.

Late last year, REA held a conference with its service providers. Muganzi tells The Observer that they emphasised the need to improve their efficiency.

However, as the auditor general notes in his 2010-2013 audit reports, which are currently being scrutinised by the parliamentary committee on Commissions, Statutory Authorities and State Enterprises (Cosase), part of the problem is “lack of supervision and monitoring of the contractors,” by REA.

This implies that the electrification agency should pull up its own socks.

DIRECT GOVT INVOLVEMENT

The dilemma that prospective electricity users in Abim face offers an insight into the challenges that the Rural Electrification Agency (REA) is grappling with in its attempt to deliver electricity to rural dwellers without the active, direct and systematic involvement of government in implementing or monitoring service provision up to the grassroots level.

In 2011, a local non-governmental organisation called Pro-Biodiversity Conservationists in Uganda (PROBICOU) undertook a study to assess the most salient energy sector issues and challenges in Uganda. The study, titled “Key issues in Uganda’s energy sector,” notes that the government lacked “appropriate mechanisms” to “enable modern and efficient energy services to be accessed by the rural population.”

“The report recommends better monitoring and regulation of operations, improved regulation of access to natural resources by investors, and increased stakeholder involvement in the energy sector. It calls for the government to recognise the role that improved energy supply can play in poverty reduction by designing sustainable energy policies,” says the study, jointly prepared by Robert Tumwesigye, Paul Twebaze, Nathan Makuregye and Ellady Muyambi.

The Africa Institute for Energy Governance (AFIEGO), which has carried out studies on Uganda’s rural electrification programme, is not entirely sold on the private sector being the major provider of what should ideally be a public good.

“If you want to help transform the poor people, it must be the government to take that responsibility to give the service so that they use it to increase their capacity and then they can start paying. That is the entry point for private companies to come in because private companies want return on investment from day one,” says Dickens Kamugisha, the executive director of AFIEGO.

Another report by Joseph Mawejje, a research analyst at the Economic Policy Research Centre (EPRC), is not as dismissive of private sector involvement. It says the government can still use private sector players to achieve its targets, but must ensure that “the policy framework has to provide adequate incentives to realise the benefits” of the programme.

Mawejje’s report, titled “Uganda’s Electricity Sector Reforms: Lessons and Challenges,” recommends making rural electrification programmes pro-poor while minimising the costs of access through using low cost electrification technologies, promoting decentralised electricity generation in rural areas using hydro, wind, bagasse-based co-generation and where applicable geothermal, as well as ensuring that power concessions and purchase agreements to private sector power distributors have specific targets for electrifying the poor.

In 2012, REA undertook its own soul-searching exercise with the aim of drawing lessons from the first 10 years of the programme’s implementation. The result of that exercise was that REA consequently developed the second phase of its rural electrification strategy and plan (RESP), which covers the period 2013-2022.

“The RESP was developed in a consultative process with the rural electrification programme’s principal stakeholders to identify corrective measures for improving the performance of the sector, focusing on measures to accelerate electricity access while ensuring programme efficiency and sustainability,” says the document.

According to REA officials, RESP II is a more refined version of the agency’s initial master plan, which it expect to deliver electricity to Ugandans in villages with fewer complications than they had to grapple with before.

INSIDE THE NEW PLAN

In its revised 33-page strategy and plan, which was released in September 2012, REA says it will employ a modified approach for rural electricity service expansion under a simplified set of implementing mechanisms.

According to the latest plan, the special-purpose vehicle for reaching the 26 per cent penetration rate target by 2022 comprises two specific electricity service expansion goals. The goals hinge on expanding on-grid services to provide 1.28 million new service connections and increasing off-grid services by 140,000 additional services of solar PV systems and mini-grid distribution service connections.

“This means that approximately 1.42 million new rural consumers will have access to electricity, making a total of approximately 1.6 million rural electric services (current rural access is approximately 180,000 consumers),” notes the plan.

Homes with and without electricity in Kanungu

To pave the way for the special-purpose vehicle to reach its destination, REA will implement nine “programme and policy adjustment measures.” The first measure is that the government will remove critical obstacles to rapid investment in rural electrification by absorbing the major commercial and financial risk for development of the project.

Secondly, rural electrification is now being implemented on a model of scaled, multi-technology electricity service territories comprising the entire rural territory of the country, with government expecting it to increase the commercial viability of rural electrification investments in a shorter timeframe.

Explaining the rationale of this model, REA boss Turyahikayo said the plans identified the creation of smaller master-plans for each part of the country, which will be marketed separately, and which will make implementation easier.

FINANCIAL INCENTIVES

“The plan has identified a number of ways which lend themselves to scaling up,” he said. “One of them is using a number of financial incentives to increase connections. The other one was, instead of planning for the whole country and getting lines scattered all over, to divide the country into service territories and in each one of them you develop a master plan instead of having one master plan. Those master plans include projects that need to be done, which make both economic and practical sense, and construction plans in a systematic manner.”

While the master plans will be smaller, the rural electrification plan itself and its management format under REA will be centralised. According to the proposal, this is being done to reduce complexity and eliminate overlapping roles. However, this proposal calls for the reconstitution of REA into an autonomous government entity in the mould of the Uganda Revenue Authority (URA), which has not yet been done to-date.

Under the new plan, energy service technologies not dependent on the national grid will also be planned, offered and furnished to eligible consumers in the service territories in tandem with on-grid electrification services.

“These include islanded community-based mini-grids and solar PV systems,” says an explanation in the plan. “The solar PV program may be implemented as REA-sanctioned projects proposed by solar PV providers or under customer aggregation schemes facilitated or owned by the on-grid service providers and directly financed by REA to improve program planning and implementation scale.”

The government also adopted a system of long-term leasing and financing contracts with electricity distribution licencees to furnish capital financing for infrastructure development for electric distribution-based investment. Another measure is to offer discounts on the cost of wholesale power to rural concession licencees in order to make on-grid electricity service more affordable across Uganda.

Finally, the government will give more priority and enhanced support to investment in small distributed power generation facilities so that they operate as local sources of electricity supply, thereby stemming power fluctuation problems such as those experienced at Kayonza growers tea factory in Kanungu district.

“This investment has the potential to mitigate potential bottlenecks in rural electrification expansion caused by power supply limitations on the national transmission network,” says the plan.

“Under circumstances such that the central grid cannot sufficiently meet the power demand of the rural service providers, in such case special rules and regulations will be provided concerning licensing power projects and wholesale power contracting to allow rural electric service providers to purchase directly from such facilities or to engage directly in small-scale power investment for their own consumption needs.”

A DREAM TOO FAR?

Kamugisha is not too optimistic about the new plan because, he argues, it is not guided by a national policy but, rather, by politics.

“There must be a policy guide because the rural electrification strategy and plan is not a policy guide,” he says. “The biggest guide is politics and if you have a service like electricity, you can never succeed [with] politically- driven motives.”

Bategeka shares a similar view, arguing that “we should differentiate from short-termism and long-term goals” in the implementation of goals that would ideally improve the fortunes of people in rural Uganda.

Bategeka believes aspiring to take electricity to all parts of the country, rather than focussing on up-and-coming urban areas in villages that people can converge to, is putting short-term targets ahead of a more integrated national development agenda that would include providing other services such as water, education, transport and health services to communities in rural areas.

REA boss Turyahikayo argues that even with the initial rural electricity plan, which it admits had some shortcomings, the agency was able to construct more electricity lines in eight years starting 2006 than Uganda had constructed in 1954-2005.

Between 1954 and 2005, according to Turyahikayo, Uganda had only 6,000 kilometres of medium voltage (MV) reticulation network. However, between 2006 and 2014, REA constructed 8,000km of MV network, while another 3,000km of MV are under implementation and approximately 10,000km of MV are earmarked for implementation in the 2015/16 calendar years. Those figures, Turyahikayo says, show the successes that are being registered due to consistent improvement of their plans, and are a sign of better things to come.

“With these measures in place and the approval of the rural electrification strategy and plan 2013-2022, the targeted rural electrification access rate is 26 per cent by 2022. REA remains optimistic that the goal is achievable,” he says.

That new rural electrification strategy and plan is already into the third year of its implementation, with another seven years to go. However, even the new plan is yet to enable the government meet its initial target of increasing rural access to electricity to 10 per cent, which should have been achieved in 2011. It remains to be seen whether REA can accelerate its projects fast enough to achieve its 2022 target.

hobenon@observer.ug

This series is the maiden product of “The Watchdog,” a centre for investigative journalism at The Observer. The articles were produced with the support of grant funding from the African Centre for Media Excellence (ACME).

 

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