Uganda has fired the starting gun on its bid to become a large-scale solar player with the selection of four projects totalling 20MW.
The country’s Electricity Authority has chosen two international consortia to develop two 5MW projects each following a competitive bidding process initiated at the start of this year.
One is a Ugandan-Italian partnership between Simba Telecom and Building Energy, the other a collaboration between the Dubai-based renewables developer, Access, and Spain’s TSK Electronica. The two consortia will build, own and operate two 5MW grid-connected projects each in Tororo and Soroti districts respectively.
The projects represent the first contracts to be awarded under the new solar element of Uganda’s ‘GET FiT’ programme. This initiative to support private investment in renewable energy in the East African country is being run in conjunction with Germany’s KfW development bank with funding from the EU Infrastructure Trust Fund.
The contracts were selected following a reverse auction process, in which developers competed on the lowest price-per-kWh bids.
According to a GET FiT statement, the average tariff for the projects was US$0.1637 per kWh, though end users will pay only US$0.11 for power from the plants. The difference will be covered by the GET FiT programme through premium payments per kilowatt hour of delivered electricity.
“Solar PV offers important advantages for Uganda: in addition to being quick to implement, solar projects can be built close to demand centres, thereby reducing transmission losses and stabilising the grid,” said Benon Mutambi, chief executive of ERA. “By introducing a new technology to the generation mix, Uganda’s dependency on hydropower is reduced, making the country’s electricity supply more resilient to climate change.”
Solar projects were ineligible for support under the initial rounds of the GET FiT programme in Uganda in 2013, but have since been included in the initiative. Overall the programme is looking to fast-track a portfolio of 20 renewable energy projects of between 1 and 20MW.
Now that the first solar projects have been selected, the development consortia will sign power purchase agreements with the Uganda Electricity Transmission Company, the country’s off-taker, and to conclude a financing agreement with the Government of Uganda for support through GET FiT.
Assuming the swift successful completion of these next steps, the projects are expected to start operation as early as the end of 2015.