Risk Management

Risk management is a continuous process running through the lifetime of a programme, where risks are identified and categorised, and measures introduced to reduce or eliminate the risks.

Grid connection. Grid connection problems are already significantly reducing the extent to which energy from GET FiT projects is being delivered to Ugandan consumers. While the overall energy produced from the GET FiT portfolio in 2018 (271 GWh) is by far the highest level to date, the total deemed energy across the portfolio totaled approximately 25 GWh. Further to this, projects due to commission in 2019-20 are also likely to generate considerable deemed energy due to outstanding grid infrastructure issues in 2019-2020. In addition to the mere energy lost for Uganda, this situation has introduced an increasing level of deemed energy obligations on GoU, which represents as a reputational risk for the GET FiT Programme. On this basis, the risk category is maintained with a high probability and high impact.

Project construction delays. Although ten GET FiT projects are now commissioned, seven projects remain under construction which represent approximately 45 percent of the total portfolio capacity. Certain projects have recently demonstrated unsatisfactory progress due to design and construction challenges and it is likely that some of these will not meet their extended deadlines (October 2019 for most projects). This will lead to subsidy reductions and thereby affect project viability and increase supervision cost. Therefore, project construction delays remain as a key risk towards achieving GET FiT capacity targets in a timely manner. This risk category is still rated with high probability and high impact.

Health, Safety and Environment (HSE). HSE risks across the portfolio have become increasingly real over the past year, with all projects now under construction. Despite projects being pushed on maintaining timelines, it is crucial that this does not compromise HSE performance in any way. GET FiT is not positioned to supervise or control the quality of developer’s HSE work on a daily basis, and these risks are therefore not formally part of the GET FiT risk control framework. Nonetheless, GET FiT supervision visits focus on monitoring performance in that respect to the extent possible, discussing HSE standards with developers and creating awareness around potential risks.

An overview of the most relevant remaining risks across the Programme is presented in Table 9.


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Table 9 - Overview of Key Risks