Government reclaims energy sector amid electricity tariff concerns

Eskom took over the operation and maintenance of the two dams in 2003 under a 20-year concession. Effective April 1, 2023 the government, through the Uganda Electricity Generation Company Ltd (UEGCL), took charge of the facilities as part of its strategy to control the energy sector to provide cheap electricity to consumers.

UEGCL also took over Namanve Thermal Power Plant following the end of its 20-year concession and currently manages the Isimba hydropower dam commissioned in 2019 while it oversees the construction of the Karuma hydropower dam.

Within the same period, the government also plans to take over distribution from Umeme in 2025 once its 20-year concession expires.

Investment decisions

However, the two newly acquired facilities have placed the government in an awkward and urgent position to strike a balance between investing in the two dams and maintaining low electricity tariffs.

UEGCL Chief Executive Officer, Harrison Mutikanga, said during a tour of the two dams on April 1, 2023, that they require at least $10 million in the short term and $150 to $200 million in the long term to extend the operational lifespan of the two facilities.

He said that some of the equipment needs immediate replacement but that some of the equipment are out of the market and replacing them would lead to an overhaul of the whole system to implement new technology.

Such activity places the government in a position where it may need to increase electricity tariffs or source external funding to keep tariffs low for local businesses and industries.

Daniel Oluka, the new generation manager at Nalubaale and Kiira hydropower dams said works on the two facilities revolve around the replacement of obsolete equipment and an upgrade of the auxiliary switch gear for control, protection and monitoring of the power equipment, the intake and tail race crane that helps in the control of water floors during the system’s maintenance and interface panels that helps in the system monitoring and remote control purposes.

Technical issues and Eskom achievements

“Every technical asset has an expected lifespan and therefore at the time of handing over the dams to us, most of this equipment needed to be replaced. Therefore, one cannot say that there was an omission during the period because most of these works had a process to be followed,” he said.

The Chief Operations Officer at UEGCL George Tusingwire, said the dams are still in fairly good condition notwithstanding identified defects.

“We think that investment in Kiira should have been more but this is not a problem. As a government, this is something we can take on and improve,” he said.

“A lot of work has been done in the last 20 years but there’s still more to be done especially with the equipment and systems that have become obsolete owed to limited investment in the dams,” Mutikanga said.