Message from kfW
Helmut Gauges, KfW Development Bank
we are looking back on an exciting and eventful year 2015, which has seen the expansion of the GET FiT portfolio as well as substantial progress in project
The third and last round of proposals for GET FiT Uganda was concluded in June 2015, and 6 promising projects were selected for support. Due to limited funding, unfortunately only 5 can be supported at this point.
Helmut Gauges, KfW Development Bank
This brings the portfolio up to 17 projects with an installed capacity of 157 MW of clean and renewable solar, bagasse and hydro power energy. Interest in GET FiT is still high, which could be witnessed through the high number of applications as well as continued inquiries about the programme by developers.
Project progress has been visible: 2015 saw commissioning of the first GET FiT project. The bagasse cogeneration plant at Kakira Sugar is now delivering 20 MW of reliable power to the national grid and received the first GET FiT premium payment. Six hydro projects started construction this year and several will start construction in early 2016. Two GET FiT projects reached full financial close, and a number of others will do so very soon.
Last year I mentioned the challenge of grid interconnection of GET FiT projects. I am proud to report that we have sourced additional funding from DFID and Financing Agreements with the Government of Uganda have been signed already. More funding from the German government (and potentially the EU) has been made available for additional critical transmission lines, which will assist in evacuating the power generated by GET FiT supported power plants.
Some challenges in the regulatory environment regarding grid-connected solar projects, such as the applicable tax treatment for solar projects as well as standard contractual agreements agreed under GET FiT, emerged last year. I encourage the Government of Uganda and ERA to continue seeking solutions to overcome regulatory challenges to retain Uganda’s reputation as a stable, reliable and attractive environment for private sector investment.
The reputation of GET FiT as an innovative and effective programme to increase generation capacity and power supply while at the same time addressing barriers to private investment and improving the regulatory framework has not gone unnoticed. I believe the continuous efforts of Government of Uganda, Government of Germany, KfW and other stakeholders have taken GET FiT from a promising concept to a role model facility for leveraging private sector investment into small scale renewable energy projects in Sub-Saharan Africa. GET FiT today is a permanent reference and subject of discussions at international investor conferences more than three years after its launch. This can only mean that something about GET FiT has "hit a nerve" in the sector and the tool box offered under the facility has been an appropriate response to current market challenges. This opinion is underpinned by the World Bank short stories essay award for "innovative solutions through public private partnerships" given to a submission by GET FiT.
To respond to this continued interest, we have commissioned a series of regional roll-out studies for similar support schemes with funding from the UK, and will create specific project proposals for a number of countries. We are also pleased that Zambia, supported by Germany through KfW, has been actively developing a GET FiT programme of their own and we were delighted to see the fruitful exchange between the Zambian delegation and the ERA team during their 2015 study tour to learn from the Ugandan experience.
Last year I mentioned Uganda’s rank in the Bloomberg New Energy Finance’s Climatescope report. 2015, Uganda has moved up again and is currently ranked 9th globally among emerging economies for clean technology investments. With this positive news I would like to conclude and wish us all a successful and exciting GET FiT year 2016.
Helmut Gauges, Member of the Management Committee
KfW Development Bank