Energy companies asked to reduce power tariffs

Kampala, Uganda |  THE INDEPENDENT | The Minister for Energy and Mineral Development Goretti Kitutu has asked companies involved in the electricity sector to work reduce the cost of power. 

The minister notes that the tariffs have remained high because the costs of doing business were high which made it hard for either the individual companies or the government to set lower prices. 

Uganda has one of the highest tariff regimes for national grid electricity in the region, despite having abundant resources like rivers for hydro power, wind, solar and geothermal, all of which are yet to be exploited fully. 

The high cost, which in turn is transferred to the final consumer, is largely attributed to the cost of financing that the sector acquires for investing in the projects.  Others include the cost of inputs like heavy fuel oil, the ageing equipment especially at the distribution level that needs constant repairs, among others. 

Speaking at the launch of the Energy Generators and Distributors Association of Uganda (EGADAU), Kitutu said the government has done enough of recent in availing the sector with special financing packages, including the Energy Credit Capitalization Company as well as the capitalizing of the Uganda Development Bank. 

Kitutu says the other companies involved in upstream level activities like generation and transmission should not take advantage of the public ignorance which leaves distributors like Umeme as the visible culprits. 

Government buys electricity from the generators at costs as high as 18 US Cents and households buy it at about US Cents 19 or 672 Shillings and the government says the ultimate aim is to reduce the cost to as low as 5 cents. 

The energy companies say they started an umbrella body that will bring all of them together for the greater good. 

The association will promote best practice and develop sector relevant technical skills by supporting initiatives of the regulator and develop industry best practice with a view of developing a culture of compliance and clear practice guidelines. 

The association currently has 13 founding partner members and is expected to bring together the more than 40 energy players in the electricity sector. 

Thozama Gangi, the Managing Director Eskom Uganda and also the interim chairperson of EGADAU says the idea to form an association was mooted in 2013 but frequent changes at the different organisation have always failed its take-off. 

Umeme Managing Director, Celestino Babungi, said the coming together of the sector players will create a better working environment and help them deliver to the public expectations. 

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URN