Abu Dhabi Fund for Development (ADFD) has approved a US$10.89mn concessionary loan to develop a 33kV rural electrification project at Kalongo in Uganda. The rural electrification project involves civil and electrical works for the installation of a 139km transmission line, as well as 88 distribution stations and 415 volts’ distribution lines on a 167km stretch that will bring electricity to about 2,000 consumers.
US$10.89mn to serve 2,000 consumers does mean US$5.500 per consumer. Additionally these consumers have to pay their electricity bill – monthly!
Of course, this is the standard way to think: in industrialised countries in the 20th century, and in Africa still in the 21st century.
But it is neither state of the art nor cost efficient if you compare these costs with a decentralized energy supply. And don‘t forget the reliability of the energy supply: with decentralized solutions you don’t have significant blackouts for all consumers.
Scale-appropriate solar-plus-storage systems (which are now state of the art in industrialised countries) can be far more rapidly, affordably and easily deployed to reach last-mile consumers and have created a billion-dollar sector.
The Tanzanian government already knows that most of its rural population can be served more cost-effectively by decentralized options. Also the International Energy Agency (IEA) states in its World Energy Outlook clearly that decentralized renewables offer the least-cost solution for three-quarters of additional electricity connections needed in sub-Saharan Africa.
The ADFD deal raises three questions:
First question: Why is the Ugandan government still mainly interested in getting the old power supply technology and not the up-to-date technology?
Second question: Why are development banks like ADFD, IFC, AfDB not interested in financing technology which is state of the art?
Third question: If DFI’s and Ugandan authorities are not aware of the most cost efficient solutions, why is there no organisation in Uganda who makes an alternative costs calculation and proposes sustainable, renewable energy supply for 2,000 consumers with decentralized energy solutions? For instance USEA, REA, Makerere University, or any other international organisation working for decentralized energy solutions.
East African countries and their fast growing economy deserve energy solutions which are state of the art in the 21st century. President Museveni’s idea that Uganda will become a middle income country within a few years barely becomes reality with outdated technique for power supply.
Harald Schützeichel is Editor of Sun-Connect News.