Message from KFW

Dear Readers,

2014 has come to an end and with it the second year of implementation of GET Fit Uganda. It has been a busy year with strong progress, both on the regulatory and legal side as well as at the project level.

The implementation of the first competitive tender for solar PV projects under GET FiT is certainly the biggest achievement in 2014. Four projects of 5 MWp each have been selected – within only 10 months of the launch of the expression of interest! They will be the first on-grid solar projects in Uganda and I would argue among the very first truly competitively awarded solar projects in Sub Sahara Africa. 

 

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Helmut Gauges, Member of the Management Committee,  KfW Development Bank

With USDc 16.37 per kWh, out of which the Ugandan consumers are only paying USDc 11 as the difference is covered by GET FiT, solar PV is already considerably cheaper than thermal power. The innovative concept of combining premium payments with a reverse auctioning process has attracted a number of renowned developers - and broad interest from other countries that see this approach as an interesting alternative to the promotion of renewable energies through feed-in tariffs. 

GET FiT is so far supporting 17 hydro, bagasse, biomass and solar projects with a total planned capacity of 128 MW. Considering the interest expressed by developers in the currently ongoing third and probably final tender, we are confident to further strengthen the Program’s project portfolio in the coming year.

With the growing project pipeline, new challenges are emerging. Interconnection and grid integration of small renewables is one of them. It proves the strong commitment of the Development Partners behind GET FiT that they are mobilizing additional financing and have joined forces with the Ugandan Government to tackle this issue! 

At the political and sector level, the recent months have been marked by efforts to fine tune the legal and regulatory framework. This is taking longer than hoped for, but it’s crucial for the sustainable development of the electricity sector. I encourage the Government of Uganda and the Electricity Regulatory Authority to keep up their commitment and take the necessary steps to prove Uganda as a stable, reliable and attractive destination for private investments. Their efforts are already showing results: not only did Bloomberg rank Uganda’s investment climate for clean energies 10th out of 55 emerging countries (Climatescope 2014), Uganda is also soon to become second only to South Africa as the country with most independent power producers in Sub Sahara Africa! 
KfW is very proud to be part of this development.

We continue to receive calls from developers and from investors that would like to get involved in the Ugandan electricity market. Even if some of them might be too late for GET FiT, there remain plenty of opportunities to invest in renewables in Uganda and elsewhere. We hope that the dynamic created by GET FiT will also positively affect private sector investments in other African countries. Therefore, we will investigate in 2015 with funding from the UK and Germany the interest and potential for similar support schemes in 11 countries in Sub Saharan Africa.

 

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Helmut Gauges, Member of the Management Committee
KfW Development Bank