Why Uganda is paying more to complete rural electricity project

• AfDB approved €7.33 million to compensate people affected by a rural power project.

• The funding will close a gap caused by rising project costs.

• Phase I has already connected over 137,000 households to electricity.

• Phase II will extend power access to nearly 1.18 million more people.

The African Development Bank (AfDB) has approved €7.33 million, about Shs30 billion, to complete compensation payments to people affected by the Uganda Rural Electricity Access Project (UREAP) Phase I.

The funding, cleared on April 7, 2026, will help government pay families whose land or property was affected during the rollout of electricity lines. It will also support completion of pending works under the project.

AfDB said the extra financing responds to increased costs identified during implementation. It will also help Uganda meet environmental and social commitments. These include ensuring all affected households receive full compensation.

Launched in 2015, UREAP Phase I aims to extend electricity to rural and peri-urban areas. Peri-urban areas are fast-growing zones on the edges of towns. The project has so far connected 137,770 households to the national grid, benefiting about 670,000 people.

AfDB’s regional energy manager for East Africa, Aleymahu Wubeshet-Zegeye, said the funding will ensure that no community is left behind. He said it allows completion of the project and fulfilment of promises made to affected families.

In a related move, the bank also approved the second phase of the project, UREAP II, on the same date. The new phase is valued at €104.39 million and will be financed through a mix of loans, a grant, and government contribution.

UREAP II will expand electricity networks across the country. It will build 624 kilometres of medium-voltage lines and 2,154 kilometres of low-voltage lines. Medium-voltage lines move power over long distances, while low-voltage lines deliver electricity directly to homes and businesses.

The second phase is expected to create about 259,723 new connections over six years. These will include households, businesses, schools and health centres. Nearly 1.18 million people are expected to gain electricity access for the first time.

Officials say the expansion will reduce reliance on firewood and other traditional fuels. It is also expected to boost economic activity in rural communities.

UREAP forms part of AfDB’s strategy for Uganda from 2022 to 2026. It also contributes to a wider target to connect 300 million people in sub-Saharan Africa to electricity by 2030.