Energy Ministry amends law to allow direct purchase of electricity by Industrialists

Energy and Mineral Development (MEMD), Minister Hon. Ruth Nankabirwa has revealed that government has gone ahead with its promise and  successfully amended the Electricity Act 1999 to allow direct purchase of electricity from transmission companies  by large industrial customers in a concerted effort to reduce tariffs for manufacturers.

Hon. Nankabirwa  made the announcement while meeting with members of the Uganda Manufacturers Association (UMA) to discuss electricity  tariffs for industrialists.

The minister explained that the direct purchase of power from the transmission companies by Industrialists was a strategic mission by government to support manufacturers in Uganda to produce sufficient goods  for import  substitution  and  increase Uganda’s exports in EAC and African continent .  Ugandan  produced goods are now found on major markets in EAC , South Africa and Europe..

Nankabirwa says her ministry is also benchmarking other countries to make the new arrangement work.

“A roadmap has been established towards implementation of the direct power purchaser from government generation plants and studies are being taken concerning the impact of the direct power purchase from government generation power plants on existing tariff management initiatives.” The Minister told the UMA delegates.

The minister said that while these  measures will  be implemented for large and extra-large industrial consumers, commercial and medium manufacturers will also be  considered . “The Electricity Supply Industry (ESI) will be working out a reduction plan of the tariff for also the commercial and medium industrial consumers in the third quarter of 2021.” She said.

As a measure to enhance business opportunities for manufacturers and support post covid-19 recovery, the Minister  assured manufacturers that the Energy Ministry and its agencies will commit to local content. “We shall support Ugandan manufacturers by allowing the supply of locally available materials to generation plants under construction, cable and transformers to Umeme Limited, Rural Electrification Programme and UEDCL.”

Nankabirwa  also said that the ministry will support the promotion of efficient energy utilization among industrialists to continuously  reduce their energy bills. “The Ministry will conduct energy audits to identify opportunities for improving energy efficiency, establish capacity to support industrialists to implement energy management systems and carry out power factor correction for factories by installing capacitor banks.”

She called upon the manufacturers to come up with innovative ideas in regards to alternative sources of energy. “Government is looking at renewable sources of energy and can attract investors who can give grants to support innovative industries to manufacture of energy saving appliances.” Nankabirwa said.

Mr. Deo Kayemba, the Vice Chairman of the Uganda Manufacturers Association (UMA) welcomed these ideas and thanked the Energy Ministry for setting up favorable policies and its continued support towards industrialists in Uganda.

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