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Industrial parks require over Shs 160bln for direct access to electricity

KAMPALA, February 17, 2024 – Parliament’s Committee on Government Assurance and Implementation has urged the Ministry of Finance to allocate a subsidy worth Shs 160.34 billion to the Ministry of Energy and Mineral Development, for direct electricity connections to industrial parks.

This is in line with a presidential directive of June 4, 2022, to reduce the cost of electricity for manufacturers to US Cents 5 per unit, and enable industrial parks to get power directly from government dams.

The recommendation is contained in a report of the Committee presented before Parliament last Thursday on the status of the presidential directive.

While presenting the report, committee chairperson Abed Bwanika, said two private industrial parks in Kapeeka and Buikwe were piloted to enable monitoring and evaluation of the impact of low tariff incomes on productivity of the industries.

He noted that a visit to two public industrial parks in Mbale and Soroti, out of the eight public industrial parks operated by Uganda Investment Authority [UIA], indicated that they were receiving insufficient electricity or facing high of accessing electricity.

“Implementation of the US$ 0.05 per unit by Ministry of Energy did not foster the spirit of fair competition because it benefitted only privately operated industrial parks. We recommend allocation of Shs 160.34 billion to cater for full implementation of the Presidential directive in all industrial parks,” said Bwanika.

MPs listening to Dr Abed Bwanika (not in photo) presenting the Committee report (Photo by Baker Ssenyonga).

The committee also observed that the execution of the presidential directive under the pilot extension of electricity to two industrial parks, did not have supporting regulations in place as required by the Electricity Amendment Act, 2022.

“Ministry of Energy should table before Parliament within one month, proof of the regulations clearly prescribing the terms under which industrial consumers may purchase electricity directly from generation or transmission companies,” Bwanika said.

The ministry was also tasked to present a clear roadmap on how government intends to extend electricity to industrial parks, directly from power generation plants.

Currently, UIA operates eight public industrial and business parks including Namanve, Luzira, Bweyogerere, Jinja, Soroti, Mbale, Kasese and Mbarara Small and Medium Enterprise Park.

The authority also supports three private industrial parks including Liao Shen in Kapeeka (Nakeseke), MMP in Buikwe district and Tian Tang in Mukono district.

Under the directive, the industrial parks should get power directly from government-operating hydro power stations of Karuma, Isimba, Nalubaale and Kiira without going through the umeme distribution network.

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