What are the opportunities for success in Uganda?
Uganda has one of the most liberalized power sectors in Africa. In 2007, GoU introduced the Renewable Energy Policy and a multi-generation type REFiT policy for promoting small-scale renewables. This REFiT policy provided a particularly attractive entry point – and exit strategy – for the GET FiT Program. Specifically, it was widely viewed in the market that the initial REFiT was slightly low to stimulate private investment in renewables in Uganda. Balancing end-user ability to pay and industry requirements, GoU and ERA committed to gradually increase the REFiT to a truly cost reflective level. This introduced a time-bound opportunity for cooperation to ensure fast-tracked promotion of new renewables in the light of the looming generation crisis.
There is increasing interest by a diverse range of investors in renewable energy in Eastern Africa. The 17 projects thus far approved by the Program all have more or less formal commitments for full investment needs totaling some USD 400M. The observed interest by local and international developers, Development Finance Institutions, international equity investors and to a limited extent commercial banks in the GET FiT Program has been overwhelming, culminating with 35 applications from independent power producers in three RFP rounds (for hydro, biomass and bagasse) and 24 Expressions of Interest for the on-grid solar power tender launched by ERA under the GET FiT Solar Facility.
Given the above and the results-based design of the support, development partners have been highly positive and provided full support - matched by considerable expectations regarding results. The design ensures that donors will provide project-level payments only once projects are delivering increased production of renewable energy, coupled by reduced emissions and socio-economic benefits. The results-based design ensures alignment of incentives for all parties involved.