Executive summary

The year 2017 has been eventful, with substantial on the ground progress for the renewable energy projects supported by GET FiT Uganda. Commissioning of the first three hydropower plants in the GET FiT portfolio represented a major milestone, introducing a combined generation capacity of 18.1 MW. Furthermore, Uganda’s second grid connected solar PV plant was successfully completed in 2017, and hence the two solar plants developed under the GET FiT Solar Facility are both operational, with a combined generation capacity of 20 MW.


The remaining eleven hydropower projects have commenced construction activities and although the majority of GET FiT supported projects are expected to be delivering power to the grid by the end of 2018 – the original Programme window – several projects are likely to overrun. Five projects are likely to achieve commercial operation within the first half of 2019 and one project is delayed until 2020.  The causes of delays have varied, with some delays a result of external factors, beyond the control of developers and the Programme, and other delays firmly in the developer’s control.  For these projects, the continued support of GET FiT in 2018 will be contingent on the developers intensifying efforts, achieving considerable progress on the ground, and demonstrating a capacity and willingness to achieve commercial operation in a timely manner.

Implementation oversight of projects during 2018 will be, more than ever, critical to achieving Programme targets.  GET FiT has introduced several tools to minimise the risk of further delays, including increased follow up on individual projects through additional supervision visits and financial penalties in the form of subsidy reductions. Efforts will be maintained and intensified in 2018 to bring as many projects as possible to completion within the year.  With all projects now under construction and most having achieved financial close, the overall risk for delays or project cancellations is somewhat reduced. This is strengthened by all remaining projects having executed PPAs with UETCL during 2017, which is yet another key achievement for the Programme. Only two projects are yet to achieve financial close, which is reportedly on track for the first half of 2018. 

The need for intensified efforts in reaching Programme goals also applies to other sector stakeholders, particularly UETCL and REA. Critical grid infrastructure required to connect GET FiT projects to the national grid have experienced severe delays throughout 2017. There is currently a high risk that new generating plants, both within GET FiT and beyond, will be commissioned without adequate connection facilities in place in the coming one to two years. Unfortunately, this is likely to increase deemed energy obligations on the Ugandan Government. To minimise these impacts, GET FiT has provided additional funds for critical grid reinforcements and will continue to offer assistance, monitor progress, and attempt to facilitate a higher level of coordination for timely implementation of these investments.

Finally, it is encouraging to see that the technical assistance provided to ERA via the GET FiT TA Facility is indeed contributing to strengthening ERAs capacity as a regulator and the Ugandan investment climate as a whole. In 2017, a new grid connection code and framework for regulating wheeling of power (transmission through a third-party network) was established. An improved framework for compliance monitoring of transmission and distribution licensees is currently being put in place, and ERA recently launched a new GET FiT knowledge transfer Programme that will aim to institutionalise experience and competence gained throughout implementation of the GET FiT portfolio. Adding to this, a new electronic regulatory system will be commissioned by ERA in 2018, further strengthening their position as one of Africa’s most forward leaning and modern electricity regulators!

2018 promises to be a momentous year for the GET FiT Programme, with a significant proportion of the Programme’s aims and objectives being realised in the form of installed power and the supply of clean, renewable energy to Uganda.  Needless to say, the Programme is in for yet another exciting year!

26138-quote-judy.png

 

GET FiT is supported by

33822-supported-by.png