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Uganda Manufacturers Pay 18 USA Cents per kWh of Power Due to Outages

Uganda Manufacturers Pay 18 USA Cents per kWh of Power Due to Outages

Samson Okwakol

Uganda Manufacturers Association (UMA) has said manufacturers in Uganda incur an additional of about 10 USA cents per kWh each time there’s a power outage, thereby increasing the cost of power to 18 USA cents per kWh when there’s a power outage.

“Thermal power is generated at about 18 cents per kWh, usually at 18 USA cents per kWh that is far removed from the 8 USA cents per kWh that we usually have for the industrial sector. So that cost of 10 USA cents that is added on, is a huge cost,” said said Allan Sseyondwa, Manager Policy and Advocacy at UMA.  

He said, the normal industrial rate for power for the industrial sector is about 8 USA cents per kwh but switching to thermal power during a power outage drives the cost to 18 USA cents per kwh thus Manufacturers in Uganda incur about 10 USA cents as additional cost whenever there’s an intermittent power outage.

“If you switch from the normal industrial rate of about 8 USA cents per kWh, and all of a sudden you have to use a generator, naturally it increases your cost,” Sseyondwa said.

UMA attributes the power outages the industrial sector is baffling with in Uganda to old electric power infrastructure.

“Power supply has increased, it has increased by over 650MW or so, so we should be having enough power in the country. Now the power outages that are happening in the country are mainly either due to infrastructure problems in different areas. For example you mention Kawempe areas, Mbalala, there are many other areas where power is intermittent, so the issue here is how to solve those,” said Allan Sseyondwa, Manager Policy and Advocacy at UMA.

He said: “Most of the problems we are facing are infrastructure problems, the electricity grid in those areas is very old. So we now have a lot of power but the infrastructure is very old.  What ERA and UMEME are trying to do is to revamp the infrastructure. Because no matter what amount of electricity you have, if the infrastructure, the lines and the transformers are old, they cannot transfer that power that is why they are trying a lot to revamp and restructure the power infrastructure so that the outages can be reduced,” 

Sseyondwa said the same challenge extends to industrial parks the government and the private sector are trying to set up.

“The truth of the matter is that when you open an industrial park, the amount of energy needed is quite an amount but the infrastructure that leads power to those areas is equally old,” Sseyondwa said.

He said what they can do as UMA, is to petition for the fast-tracking of power lines to the industrial parks and that there’s already an arrangement towards that direction.

Available information indicates that manufacturers are the biggest consumers of electricity in Uganda and they are the biggest driver of Uganda’s economic growth.

According to UMEME, industrial customers contribute up to 68% of the total electricity demand in the country. From June 2019, UMEME reported that electricity sales volume grew by 7% to 1563gwh up from 1461gwh the previous year and this was driven by industrial demand and increased grid connection.

However, the Media Relations Manager, UMEME Stephen Ilongole says that Uganda loses about 60 hours every year to power outages.

“Five years back we used to have 120 hours of power outages in Uganda but now, we have like 60 hours of power outages per year but the plan is to reduce further,” Ilongole said.

He said: “Many times people think UMEME deliberately switches off power but it is not in our best interest to do so. It is known the more we supply power without interruption, the more we make money,” Ilongole said.

A few months back, the media was awash with the news that UMEME lost over Ushs900m in Northern Uganda due to power outages that took days and months.

Sseyondwa said Upcountry the issue is a different, because in some areas, it is rural electrification agency which is in charge, so in those areas, there might be no power at all but because of the increase in the generation of power, UMA said there’s an infrastructure plan to ensure that the whole country is covered.

In Kampala, most arcades according to the Chairperson Kampala City Traders Association, Everest Kayondo are not prepared in any way to counter power outages.

He said a normal arcade in the city has about 400 shops and owners find it expensive to procure generators that can run all those shops. In fact, a visit by the writer to Nasser road revealed that only one arcade had a generator that can run all the equipment in different shops the rest do not have.

Haman Katende, a business man on Nasser road said they are basically doing manufacturing and according to him, power supply in the area has improved. However they still experience power outages twice a month and this cost him about 500000Ushs each time the power outage happens.  

According to KACITA, business people who operate in arcades that have standby generators incur an additional cost of about Ushs1.5m per annum and more.

“Once it goes off, it becomes an inconvenience because you who is an employer or employee, whose work dependents on electricity and don’t have any other provision beyond electricity you not working but labour has turned up, you have to pay them,” Kayondo said.

He said: “What is disturbing is that this people keep on telling us that they have power in excess and they are paying for excess production but the supply is not constant.  Again if government is paying for excess production, then there’s no compensation on the side of the user for getting the outage when you are supposed to use it. There would be compensation. Yes as you are making our government pay for excess production you should pay as the distributors for the outages on the part of the consumer,” Kayondo said.

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