Lasting value in Uganda’s energy resources

What main goals has the ministry achieved so far in the energy industry?
In the oil and gas sub-sector, preliminary petroleum exploration activities in the Moroto-Kadam Basin were undertaken during 2020, with results so far being encouraging. An oil seepage has been mapped in the basin as well as mapping of lithology that is conducive for generation and accumulation of hydrocarbons.
We have also been working on attracting investors and companies, including majors, for them to participate in the ongoing second licensing round, which was launched in May 2019. Currently, four of the investors are participating in the bidding stage.
The ministry has also conducted the procurement of key and industry-standard laboratory equipment to facilitate the verification and confirmation processes of hydrocarbons. These include petrography and Hawk analyser equipment.
Finally, we have also approved the farm-out of Tullow Uganda Operations interests in Uganda to Total E&P.
In terms of the promotion of renewable energy systems, the government has continued with the promotion of the use of renewable energy technologies with the objective of broadening the power generation mix. Key sources being pursued are solar energy for lighting, irrigation, mosquito control and fruit drying, as well as the development of ethanol for cooking and the promotion of biogas technology and biomass resource replenishment.

What have been the ministry’s key achievements in the past year in the power sector?
The energy and mineral development sectors have made significant progress towards the achievement of the national development objectives as spelt out in the National Development Plan II and in the NRM Manifesto 2016-2021, although several delays have been registered due to the Covid-19 pandemic, which greatly restricted operations and implementation of projects within the sector.
In terms of specific achievements in the energy sub-sector, electricity generation capacity has increased from 1,254.2 MW to about 1,260 MW. However, the sector has continued with the implementation of several projects, including the 600-MW Karuma hydropower plant (progress at 98.7% as of March 2021), the 15-MW Nyamasagani-1 hydropower plant (progress at 90%) and the 6-MW Nyamasagani-2 hydropower plant (progress at 90%). The 400-MW Kiba hydropower project has had its technical feasibility studies and environmental and social impact assessment studies completed, which are now under review by the government; and the 840-MW Ayago hydropower project will see its feasibility study completed by the end of 2021.
In terms of the expansion of transmission and distribution, the transmission network was expanded by 13% to 2,989 kilometres by the end of 2020. This increment was the result of commissioning the Kawanda-Kapeeka 132-kV 52-kilometre T-line. Additionally, the construction of the 132-kV Lira-Gulu-Nebbi-Arua transmission line, which will connect the West Nile to the national grid, is expected to be completed by 2022. Other transmission lines in progress include the Karuma-Kawanda 400-kV transmission line, which is 99.5% complete.
With regards to increasing access to electricity, a total of 2,550 kilometres of medium-voltage networks and 2,596 kilometres of low-voltage networks were added onto the grid. About 152,482 households received access to electricity under the Electricity Connections Policy (ECP) between July 2019 and June 2020. The electrification process of all sub-counties was slowed down because of the Covid-19 pandemic, but it is expected to be completed by the end of 2022.

What are the ministry’s strategic pillars?
Our strategic goals are to meet the energy needs of Uganda’s population for its social and economic development in a sustainable manner, as well as to use the country’s oil and gas resources to contribute to the early achievement of poverty eradication and to create lasting value to society. Finally, the ministry also aims to develop the mineral sector for it to contribute to sustainable national economic and social growth.
In order to achieve this, a few things need to be done first. We must review and put in place modern policies and legislation that offer a conducive business environment. Acquiring and providing necessary information and data to attract and facilitate the private sector and capital inflows is also very important.
The energy mix in power generation must be increased, and new power generation and transmission projects must be developed. The promotion and implementation of rural electrification is also very strategic, through grid extension and the development of decentralised power supply systems.
Petroleum exploration, development and production by the private sector must be promoted and monitored, for both local consumption and exports. Specialised and general training of manpower initiatives must also be developed, in order to strengthen the capacity of all institutions responsible for managing and safeguarding Uganda’s energy and mineral resources.
We must also establish standards and promote product quality, industrial safety, and environmental protection in petroleum supply operations. Finally, we must promote more efficient modes of transportation in order to maintain the security of petroleum products supply and curb smuggling.

What are the ministry’s key priorities in both the exploration and development areas of Uganda’s oil and gas industry?
The current key priorities for the oil and gas exploration and development are to undertake additional definitive exploration in order to improve our resource base and ensure the sustainability of our production, open up frontier basins for additional exploration activities, ensure that FIDs for both upstream and midstream infrastructure are approved, ensure the formulation of comprehensive policy and legislation for the sector, and ensure that first oil is achieved soonest.

How is the ministry planning to leverage Uganda’s growing energy industry to attain social and economic objectives?
In order to contribute effectively to the national economic recovery arising from the aftereffects of the Covid-19 pandemic, the ministry plans to focus on the following objectives: increase access to and utilisation of electricity, increase generation capacity of electricity, increase adoption and use of clean energy, intensify the promotion on the utilisation of energy-efficient practices and technologies, fast-track sustainable production and utilisation of the country’s oil and gas resources, increase exploration and quantification of priority minerals and geothermal resources across Uganda, promote private investment in the sector and, finally, strengthen the legal and regulatory framework in order to promote good governance and transparency as well as human and institutional capacity development.
As an example of this, the National Content Policy favours citizens and local entrepreneurs to participate in and benefit from the oil and gas industry.

What is your final message to investors?
Uganda enjoys a unique location at the heart of sub-Saharan Africa, within the East African region. It is land linked, giving it a strategic commanding base to be a regional hub for trade and investment. Uganda also enjoys pivotal trade partnerships that create a viable market for business; and the business operating environment allows the full repatriation of profits after the mandatory taxes have been paid, as well as 100% foreign ownership of private investments.
The incentive regime is structurally embedded in the country’s tax laws, making them non-discriminatory and accessible to both domestic and foreign investment, depending on the sector and level of investment.