MINISTRY OF ENERGY AND MINERAL DEVELOPMENT
The Mandate of the Ministry of Energy and Mineral Development is to “Establish, Promote the Development, Strategically Manage and Safeguard the Rational, Sustainable Exploitation, Utilization of Energy and Mineral Resources for Social, and Economic Development”.
The energy ministry has over the last one year overseen the passing of at least three key bills that are deemed crucial to improving operations in the areas under its jurisdiction. The bills passed between December last year and April this year, include the East African Crude Oil Pipeline bill 2021, the Mining and Minerals Bill 2022 and the Electricity (Amendment) Bill 2022.
Electricity (Amendment) bill 2022 For the first time in over 20 years, amendments were made to the Electricity Act 1999 to cater for several changes and developments that have occurred in the electricity supply industry. Top among these was the introduction of stringent penalties to address the vandalism of electricity infrastructure that has of late become a cancer eating away installations in the transmission and distribution segments.
Royalties The new mining and minerals bill, among other things, revised how royalties from minerals will be shared. In the bill, government will earn 70% of the royalties. Additionally, districts will earn 15% as sub-counties and landowners earn 10% and 5%, respectively.
Prior to the passing of the bill, the government took 80% of the royalties, while the host district and the landowner were entitled to 17% and 3%, respectively.
Increase in royalties to the local governments is expected to increase their incomes and bolster their capacity to improve the livelihoods of the people through better roads, schools, and health facilities. EACOP Bill 2021 The East African Crude Oil Pipeline (EACOP) Bill 2021 was passed by Parliament in December last year, with the aim of putting in place the legal requirements for implementing the crude oil pipeline. One of the highlights of the EACOP Bill is that it paved way for the formation of the EACOP Company that will own the crude oil pipeline. The EACOP company, which is under formulation by the joint venture partners, will be entrusted to own and run the crude oil pipeline. Four entities, including Total, China National Offshore Oil Corporation (CNOOC), the Uganda National Oil Company (UNOC) and Tanzania Petroleum Development Corporation (TPDC) are shareholders in the EACOP Company.
According to the recently signed shareholders’ agreement by the joint venture partners, Total will be the majority shareholder, with 62% shares. Both UNOC and TPDC will each hold 15% of the shares, while CNOOC 8%.
With effect from FY2021/22, Government adopted a Programmatic Approach to Budgeting, which requires all Government Ministries Departments and Agencies (MDAs) to align their priorities to the National priorities within the programs identified in the NDP III. In this regard, the Ministry of Energy and Mineral Development is the lead entity for three programs defined in the NDP III, namely Sustainable Energy Development; Sustainable Development of Petroleum Resources and Mineral Development.
Priorities for the Medium Term have been defined in view of the three NDP III programs objectives under the Ministry as follows: –
- Sustainable Energy Development programme
- Sustainable Development of Petroleum Resources programme
- Mineral Development Programme
STATUS OF IMPLEMENTATION OF CORE FLAGSHIP PROJECTS UNDER NDP III
Sustainable Petroleum Development Programme
Achieve sustainable production and utilization of the Country’s oil and gas resources
Final Investment Decision for Uganda’s oil and gas projects: On 1st February 2022, Total Energies EP Uganda, CNOOC Uganda Limited, the Uganda National Oil Company (UNOC) and the Tanzania Petroleum Development Corporation (TPDC) announced the Final Investment Decision (FID) for Tilenga, Kingfisher and East Africa Crude Oil Pipeline (EACOP). The FID announcement signified the commitment of the oil companies to invest close to US$ 10 billion to develop Uganda’s oil and gas resources through the implementation of the Tilenga Project in Buliisa and Nwoya districts; the Kingfisher Project in Kikuube District and the EACOP that will cross the ten (10) districts of Hoima, Kikuube, Kakumiro, Kyankwanzi, Gomba, Mubende, Lwengo, Sembabule, Kyotera and Rakai in Uganda.
Refinery Development: The Front-End Engineering Design (FEED) was submitted by the refinery investor in August 2021; Government reviewed the report and the approval process by the Petroleum Authority of Uganda is ongoing. The RAP study for the Refined Products Pipeline from Hoima to Mpigi was completed and valuation reports approved by the Chief Government Valuer. The RAP consultant has undertaken disclosures in all the seven (7) districts to be crossed by the Pipeline that include; Hoima, Kikuube, Kyankwanzi, Kiboga, Mpigi, Wakiso and Mityana. Implementation of the RAP including compensation and resettlement of project affected persons commenced but is being slowed down by inadequate funds. Development of the Hoima International Airport at Kabaale is progressing well, with the runway standing at 71% complete, which shall aid the transportation of heavy refinery machinery.
Upstream Projects: The contracting for goods and services is ongoing for the Tilenga and Kingfisher projects and some Ugandan companies have been awarded contracts. Early project activities have equally commenced in preparation for First Oil by 2025. Land acquisition activities in the Tilenga Project Area and Kingfisher Development Project continued to be undertaken through implementation of the Resettlement Action Plans (RAP). The Ministry ensured that verification and conclusion of agreements with affected persons to pave way for payment of land-affected persons are expedited.
EACOP Project: EACOP RAP study was completed and approved by the Ministry. Implementation of the RAP through the payment of compensation is ongoing with the target of clearing the land for commencement of civil works in the FY 2022/23. In this regard, the Ministry has commenced discussions with the EACOP Company regarding the issuance of a construction license for the project.
Strengthen policy, legal and regulatory frameworks as well as institutional capacity of oil and gas industry:
Review of the National Oil and Gas Policy for Uganda, 2008 (NOGP’08): The Ministry through multi-institutional steering committee continued to review the NOGP’08 and Energy policy 2002 to formulate a comprehensive National Petroleum Policy (NPP). During the period under review, a Second draft was generated and is currently being shared with various stakeholders for their comprehensive review and input. Once completed, the new policy will guide on the updating of relevant laws and regulations governing the petroleum Programme.
The East African Crude Oil Pipeline (EACOP) (Special Provisions) Act, 2021 was enacted and is now guiding the development of the project in Uganda. In accordance with the Intergovernmental Agreement (IGA) for the EACOP the Governments of Uganda and United Republic of Tanzania are establishing the IGA Consultation Committee to coordinate the development of the project in the two countries. The Public Finance Management (Amendment) Act, 2021 and Income Tax (Amendment) Act, 2021 were also enacted.
Extractive Industry Transparency Initiative (EITI): The Uganda Extractive Industries Transparency Initiative (UGEITI) is in the process of producing its first EITI report (on minerals and petroleum) and the Ministry is deeply involved in the process.
Phase 3 construction of the proposed Office and Data Repository Centre for the Directorate of Petroleum and the Petroleum Authority of Uganda: The construction progress of Phase III construction works is almost complete. Since early February 2022, the building has been under occupation by the Directorate of Petroleum and Petroleum Authority of Uganda as the contractor concludes the remaining few works at the ICT, Auditorium, Core Store rooms plus land scaping.
Enhance local capacity to participate in oil and gas operations
Enterprise development: In order to build the capacity of Ugandan companies to participate in the oil and gas operations, government has trained over sixty (60) local companies in bid management processes for the petroleum industry as well as forty (40) SMEs in Health Safety and Environment standards to ISO 14001. A project to train and upskill over 200 SMEs along the EACOP was launched and is underway. The Terms of Reference for the Capacity Needs Assessment Study for Farmers along the EACOP route in Uganda have been developed, once the study is launched, over 300 farmers along the EACOP will be upskilled to enable them produce the right agricultural products with the right standards to meet the contractors’ requirements.
Skills development: In order to increase the employability of Ugandan citizens in the Petroleum industry, Government together with its development partners like GIZ have trained over 500 youth and certified them to oil and gas international standards in construction skills such as plumbing, electrical installation and maintenance. Over 20 Heavy Goods Drivers have been trained and internationally certified. Over 35 Vocational Training Institutions have been engaged on the skills requirements for the oil and gas sector in order for them to train industry relevant personnel. Government is also updating the Capacity Needs Analysis and the Workforce Skills Development Strategy and Plan for the oil and gas sector in Uganda.
Local Content Development Fund: The Ministry undertook a Regulatory Impact Assessment and developed principles for the establishment of the Local Content Development Fund to provide financing to Ugandans to participate in the oil and gas sector. The Ministry will proceed with the process once the certificate of financial implication is obtained.
Promote private investment in oil and gas industry.
Promotion of the country’s petroleum potential: The Ministry is undertaking various promotional efforts in view of attracting further investment in the country’s oil and gas industry through; –
- Disseminating promotion materials to and engagements with companies interested in investing in Uganda’s oil and gas sector.
- Undertaking the 2nd Licensing Round Strategy and Plan. The award of the respective exploration licenses is expected by June 2022.
- Undertaking detailed geological, geochemical and geophysical surveys in the Moroto-Kadam Basin in an effort to open up the region to attract the required investment. .
- The Ministry continued to assess the country’s oil and gas potential and compilation of the Petroleum Resources discovered in the country to date. This facilitates Government’s reporting of the oil and gas resources in the country as well as a quality assurance tool for the estimates communicated by the oil companies.
Improve security of supply of refined petroleum products
Promoting alternative routes for petroleum product’s transportation: Due to logistical challenges the Oil Marketing Companies (OMCs) are experiencing through the Kenya route which has been creating at times scarcity of products on the local market. The OMCs are continuing to keep the Dar-es-Salaam route open and in March 2022, importation through the Dar-es-Salaam contributed 13% of the monthly import, although the logistics have bearing on landed costs.
Natural Gas Pipeline: Government of Uganda is to jointly undertake a Feasibility Study for the Natural Gas Pipeline Project from Tanzania to Uganda to support the iron and steel industry. Draft documents to guide the execution of the joint feasibility study and other related project activities developed which include the Joint Operating Strategy, Draft Joint Procurement and Disposal Rules and Intergovernmental Agreement (IGA)/Bilateral Agreement.
Promotion of liquefied petroleum gas (LPG) usage in the country: The current LPG usage at household level in the country is about 0.8%. Enhanced usage of LPG will save the country from the current problems emanating from use of Biomass, which is currently at 94% and has exposed the country to devastating effects of deforestation and environmental degradation, excessive carbon emissions together with environmental pollution resulting in global warming and adverse climatic change.
Mineral Development Program
Online Mineral Licensing System: The mineral sector is now licensing through an online platform, eliminating the delays of the paper-based licensing system. All applications, renewals and payments are now done online. A total of 680 mineral Licenses are operational and 15 mineral licenses have been cancelled for non-performance.
Formalization of Artisanal and Small-Scale Mining: Continued with the sensitization and formalization of miners. Over 20,000 ASM were registered in Mubende and Kassanda areas. The miners were trained in best mining practices, environment, health and safety in mining and business skills. Completed the design of Biometric Registration of Artisanal and Small scale Miners (BRASM) that is linked to NIRA system. The BRASM was launched in Gulu on 10/09/2021 and over 200 miners have been registered biometrically.
Mineral Investment Promotion: Government promoted and attracted investment from a number of competent mineral exploration companies in its mineral resources. The projects are now at mine development stage. These projects include Wagagai Gold Project in Busia that was on 5th October 2021 the largest gold deposit so far quantified with estimated resource of 12.9 million tons of gold ore at a grade of 2.89g/t.
Other investments include: Graphite Project in Orom, Kitgum by Consolidated Africa (U) ltd; Rare Earth Elements (REE) Project in Makuutu, Bugweri District by Rwenzori Rare Earth Elements; Jervoir Base metals in Rwenzori, Kiboga and Karuma; Nickel project at Zeu, Adjumani by SAMTA Mines and Nickel Project at Akelikong, Lamwo District by SIPA Exploration Co. Limited and Evergrande Gold Project in Amudat.
Airborne geophysical Surveys and geological mapping of Karamoja Region: The Government of Uganda contracted X-Calibur, a Spanish company to carry out Airborne geophysical Surveys and geological mapping of Karamoja Region to establish the mineral potential of the region. The aerial surveys commenced on 1st April 2021 and have achieved new data sets of Gravity at 100%, Magnetic 97% and Radiometric 97%.
Establishment of the geological and mineral potential of the country: Government has established 103 million tonnes (MT) of iron ore in Kabale District and 15MT in Rubanda District, bringing the total iron ore reserves in south western Uganda to 318 MT with estimated resource of up to 1billion tonnes. The iron ore in Kabale and Muko is associated with gold, Nickel, Zinc, Tin, Titanium and wolfram. Government undertook assessment of the proposed 10 iron ore prospects in Kabale and Kisoro districts under collaboration with the European Union. The team identified four drill whole sites in every iron ore prospect and collected information on the status of each drilling site.
Government commenced re-evaluation of Kirwa wolfram to map the extent of the mineralization.
Monitoring of geotectonic events: The Government of Uganda undertook reconnaissance survey in West Nile region to identify sites for installation of seismic stations. Nine sites have so far been identified in the following districts, Nakasongola, Pakwach, Zombo, Arua, Yumbe, Moyo, Amuru, Gulu and Lamwo.
Regional mineral beneficiation centres: Construction of mineral beneficiation centers is in progress in Fort Portal at 90% and Ntungamo Districts is completed, awaiting verification and hand over.
Geothermal Investigation: Eight (8) Temperature Gradient Holes (TGH) were drilled at Kibiro in Hoima District. The data is being analysed and the information will be the basis for drilling deep exploration wells at Kibiro. Other sites include; Panyimur and Kibiro, Buranga and Ihimbo and Kanangorok in Rukungiri and Karenga.
Mineral Laboratories: Government established a functional mineral analysis laboratory in Entebbe and is to sign a contract to have the laboratory certified and accredited. New equipment such as ICP-OES, Portable XRF, and Ion Chromatography & Carbon Sulfur Analyzer have been installed and seven more equipment for mineral beneficiation tests are to be supplied and installed this financial year.
Kilembe Mines Project: Government put in place an inter-ministerial committee to identify a private investor for the development of the mine. The process of identifying the investor under a Public-Private Partnership has commenced.
The Mining and Mineral Bill, 2021; The Mining and Mineral Bill, 2021 was tabled before Parliament on 17th February, 2022 and it was passed with amendments. Key amendments included: Minister to issue mineral licenses, PSA to apply only to brown fields and strategic minerals, Building Substances and Regulation of Earth Scientists removed from the Act and recommended for a separate Acts, Mineral Protection Force removed, and internal enforcement mechanism recommended.
Gender Mainstreaming in the Mineral Sector: Continued with the capacity building on gender and equity in the mineral sector. A team of geoscientists participated in regional gender mainstreaming and validation workshops in Fort portal in western Uganda and Mbale Elgon Hotel in Eastern Uganda.
Sustainable Energy Development Programme
Electricity Generation:The total electricity generation capacity increased from 1,268.2MW to 1351.7 MW of which 1,235.2MW supplies the main grid, 13.98MW is off grid and 102.5 MW is for own consumption which is mainly by the bagasse cogeneration plants against a peak demand of about 800MW. This is as result of completion of the 42MW Achwa I, 15MW Nyamagasani I, 6MWNyamagasani II and 15.5MW increase at SCOUL (March 2022).
The Sector continued with the implementation of the following projects: Karuma Hydropower plant (600MW), Muzizi (48MW): Isimba HPP 183MW, Namanve thermal power plant, Ayago Hydropower Project (840), Kiba Hydropower Project (400 MW) an Oriang Hydropower Project (392MW).
Electricity Transmission and Distribution Network: The transmission network increased from 3,100km in 2020 to 3,431km as at end of Quarter 3 FY2021/22. The increment is from the commissioning of Karuma -Kawanda 400kV and Karuma – Olwiyo 132 kV Transmission Line. The Luzira Substation was completed but its commissioning awaits completion of the 15km, 132kV transmission line. The transmission network losses stand at an average of 4.1%.
The following projects are under different stages of construction: Construction of the following; Opuyo-Moroto 132kV transmission line, the 132kV Lira-Gulu-Nebbi-Arua Transmission line, Mutundwe – Entebbe 132kV,Tororo – Opuyo – Lira, 132kV: Lira – Opuyo Section is complete and energized, Industrial Parks Phase III: Government signed a bilateral Agreement with Government of Sweden under which a transmission line project is to be developed with the objective to grow demand to absorb power generated and provide reliable power to industrial parks to Kira Motors and environs, Masese, Njeru, Ishaka, Kaseses and Kaabale, Lira-Gulu-Agago, 132 kV line with associated substations, Grid Expansion and Reinforcement Project (GERP); NELSAP Projects: Procurement of the consultant to undertake the feasibility studies for 400kV Uganda (Olwiyo)-South Sudan (Nimule-Juba) transmission line was concluded and assignment commenced on 14thMarch 2022. Selection of the consultant to undertake feasibility studies for 400kV Uganda –D.R Congo interconnection is ongoing, and the 400kV Uganda (Masaka)-Tanzania (Mwanza) interconnector: Procurement of a consultant to undertake feasibility studies for this interconnector is ongoing.
Electricity Distribution Infrastructure and access
In the past five years, our distribution network has expanded by 33% from a total length of 40,525 km in FY2016/2017 to 53,733 km by the end of FY 2020/2021. Additional 23,189 km is expected to be added once all schemes under the electrification of sub-counties project are commissioned.
District headquarters: All district headquarters have been connected to the National electricity grid except Buvuma District. The Feasibility Study to connect Buvuma District headquarters to the electricity grid was completed. Government has secured funding for the marine cable to connect the Buvuma district to the National grid.
Electrification of all the 570 Sub-counties to accelerate access is progressing well and is expected to be completed soon.
Electricity Access Level: According to the National Electrification Strategy Study Report (NESSR) 2021, the national electricity access stands at 57% of which, 19% is on the grid and 38% off-grid mainly through solar home systems. The drop in the grid electricity access level from 24% in 2019 to 19% in 2021 was occasioned by the COVID-19 pandemic which impacted commitment of resources towards the implementation of the Electricity Connections Policy and a number of projects were slowed down.
As of March 31, 2022, a total of 348,954 households had received access to electricity under the Electricity Connections Policy (ECP).
To increase the level of electricity access, the Electricty Access Scale-up Project (EASP) has been developed by Government with support from the World Bank aiming to increase access to energy for households, commercial enterprises, industrial parks and public institutions. The Project commencement is planned for FY 2022/2023.
Promotion of Renewable Energy Systems
Biofuel Development and Promotion: The Ministry of Energy and Mineral Development is finalizing the gazetting of the licensing authority and development of Biofuels Regulations to operationalize the implementation of the Biofuels Act 2020. The draft regulations define the minimum blending of biofuels in petroleum products. The regulation further establishes the requirements for licensing procedure for production, storage, blending and transportation of biofuels. The Regulations are expected to be tabled by the Hon Minister before parliament by end of this FY 2021/2022 and onward gazettement.
Development of Busitema 4MW Solar Project: The Government of the Republic of Uganda and the Government of the Arab Republic of Egypt finalized the installation of the 4 MW grid connected solar project at Busitema University.
Nationally Appropriate Mitigation Actions (NAMA) on Integrated Waste Management and Biogas in Uganda (NAMA Biogas Project): The Ministry is implementing the NAMA on integrated Waste Management and Biogas Production in Uganda project.
The project which commenced in 2018, aims to reduce greenhouse gas emissions, address pollution to the environment from poor wastewater management, and environmental degradation due to improper and inadequate management and treatment of solid waste as well as agro-processing and municipal wastewater in municipalities in Uganda in the following cities: Mbale, Jinja, Masaka, Mbarara and Kampala City Council Authority.
Promotion of clean cooking in institutions: Under ERT program in preparation for the Energy Scale up Project Clean cooking component the Ministry has finalized a plan to conduct a consultancy service for the energy needs assessment study in over 800 educational and health, prison, police institutions to access the energy cooking needs to feed into the implementation framework for the Energy Access Scale up project (EASP) whose consultancy is expected to commence in March 2022.
Solar fruit driers: The Ministry is under taking studies on installed demonstration solar-bio dryers in Kasese District, in collaboration with Makerere University and LWF. These dryers will be used for quality coffee drying and will serve as a demonstration for the surrounding areas.
Solar street lights: Government installed 60 solar street lights in Nagongera Town Council, Lumino Town Council, Buikwe Town Council, Rwetuha Town Council, and Mukono Municipal Council.
Solar lighting in schools and health units and solar mosquito killers: The Ministry received a grant for demonstrational solar systems from the Hunan Provincial Government of China in 2019 with the main objective of promoting the productive use of solar technologies in Uganda.
Solar Mini Grid: The Ministry of Energy and Mineral Development is planning to commission six fully constructed solar mini-grid plants of Kasenyi 37.23 kW, Kashaka 28.05 kW, Kazinga 26.01kW, Kihuramu 18.36 kW, Kisebere 16.83 kW, and Kisenyi 32.13 kW in Rubirizi and Kasese districts. These solar mini grids were constructed by World Wide Fund for Nature .
Solar water pumping schemes: The ministry is facilitating 11(eleven) solar water pumping schemes (WSS) that commenced in July 2020 in the areas of: Malere WSS in Kamwenge District, Kyamutunzi WSS in Kyenjojo District, Kiboga WSS in Kiboga District, Katuugo and Kakooge WSS in Nakasongola District, Wol WSS in Agago District, Oyam WSS in Oyam District, Ovujyo WSS in Maracha District, Kacheri WSS in Kotido District, Awoo WSS in Omoro District and Aloi WSS in Alebtong District. These are under construction and are due for completion by May 2021.
Nuclear Energy Development
The Government hosted the Integrated Nuclear Infrastructure Review Mission based on the International Atomic Energy Agency Milestone Approach in November 2021 to evaluate Uganda’s readiness to construct and operate the first nuclear power plant.
The mission concluded that the Government of Uganda is committed to developing the required infrastructure for nuclear power in a coordinated approach with all concerned stakeholders.
Relatedly, progress is being made to build specialized nuclear institutions and conduct preparatory work towards construction of the first nuclear power plant.
Energy Efficiency and Conservation
Government is implementing a number of Energy Efficiency and Conservation Plans, Strategies and Programs for improving Energy Efficiency throughout the Energy Supply Chain, in support of the economic and social development goals of the country. Some of the key undertakings of the Ministry in regarding to the efficient utilization of energy include:
Promotion of alternative and efficient cooking
Government commissioned an alternative fuel study with the objective of identifying key actions to strengthen and create an enabling environment for clean and efficient cooking in Uganda and address the negative environmental and health impacts associated with inefficient cooking methods. One of the outstanding finding is the switch to electric cooking. With the support of the electricity regulator where a cooking tariff was introduced, it is being made possible for grid-connected customers to use electricity for cooking instead of charcoal and firewood.
Promoting energy efficiency among industrialists and SMEs
Government has continued to support the conducting of energy audits among SMEs and large industries with the objective of facilitating the identification of the energy efficient measures that can be adopted to improve energy efficiency.
Regional harmonization of Minimum Energy Performance Standards (MEPS) for lighting appliances, i.e. Lamps and Luminaires
Government through the Ministry of Energy and Mineral Development and the Uganda National Bureau of Standards in close cooperation with the National Standards Bodies in Partner States, developed a framework to harmonize the requirements governing lighting products.
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