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Ministry Of Energy To Borrow $400 Million For Power Connection

Ministry Of Energy To Borrow $400 Million For Power Connection

Government through ministry of energy is to borrow 400 million dollars from World Bank for power connection, Energy Minister Mary Goretti Kitutu has revealed.

The money will be used to increase power connections in rural areas where there is no grid.

Kitutu was launching the resumption of the Electricity Connections Policy  (ECP) that was established in 2018 but had to be put on hold in December 2020 due to financial constraints.

“The launch of the resumption of the ECP will pave way for subsidized electricity connection to consumers within one pole services. The policy has also been revised to accommodate those who are able and willing to pay to do so in cases where government has no resources to implement policy, “Kitutu explained.

The Electricity Connection policy provides free power connections to domestic users and increase power generation capacity as well as expand transmission and distribution network.

ECP was approved by cabinet by January 2018  but its implementation commenced on 1st November 2018 for a period of ten years 2018-2027.

The goal of ECP is to achieve 60% level of access to grid electricity in Uganda by 2027 by increasing the number of connections made annually from the average of 70,000 before the policy was made to 300,000 connections. This is in line with national development plan111 and vision 2040 goals of increasing electricity access in the country in order to improve the quality of life of Ugandans through sustainable industrialization for inclusive growth, employment and sustainable wealth creation.

Covid Challenge

The planned high number of new connections required corresponding high budget provision from government which became a challenge especially after the out break of covid 19 pandemic due to many competing demands for resources and caused significant delays in making new connections by the service providers.

According to ministry of energy, backlog of electricity connections due to funds constraints stood at about 200,500  as of 7th December 2020 and kept government in arrears for connections made by service providers totaling shs 103.4billion.

Principal Corporate Manager Dr. Patricia  Litho says  Rural Electrification Agency has been able to procure over 87,500 connection materials under the African Development Bank funding in addition to the 2,598 connection materials under the Islamic Development Bank funding phase one.

She however says utilizing the government of Uganda funds for the financial year 2020/2021 releases, government has allocated 14.2billion to Uganda Electricity Distribution and Company Limited and small service providers to partly pay for already made connections and commence new connections on 8th March 2021.

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