Gov't Rolls Out Program for Subsidized Prices on Clean Energy Equipment

The government has rolled out the program of reduced prices on clean energy equipment in a bid to enhance access to affordable and sustainable energy for Ugandans. 

The project is worth up to 400 billion shillings, with funding from the World Bank aimed at promoting clean energy usage and increasing the accessibility of renewable energy technologies across the country.

The price subsidy program will be administered by the Uganda Energy Credit Capitalization Company (UECCC), a government agency responsible for promoting financing for clean energy projects. It is part of the agency's Results-Based Financing (RBF) Facility under the Electricity Access Scale-Up Project.

Speaking at the launch, Ruth Nankabirwa the Minister of Energy and Mineral Development, said that the program will run until June 30, 2027. “This is aimed at increasing access and adoption of clean energy through financial support for clean cooking solutions, off-grid solar technologies for households and enterprises, as well as access to on-grid and off-grid productive use technologies to support business development and productive applications,” Nankabirwa said.

        

She adds that the program seeks to make clean energy affordable and accessible to rural households, vulnerable groups, and refugee-hosting communities, reaching both urban and rural areas. “To achieve this, UECCC has partnered with 67 ESCOs and these will use market-based approaches to deliver price subsidies to Ugandans and refugees. The companies will sell their products as they ordinarily do, and buyers will pay for the chosen items, but at discounted prices. “The companies in question are all certified by UNBS,” she added.      

According to Nankabirwa, the government has new strategies in place to approach the challenges in the power sector. This includes private sector participation both in existing operations as well as the financing and management of investments in the power sector. "For emphasis, UECCC has extended lines of credit to 18 financial institutions to support end-user financing and working capital loans to energy service companies. And as by 2023, the company has enabled 1,350,000 Ugandans to access clean energy, including solar, biogas, and commercial on-grid connections," she noted.  

"I have now been informed that 42 financial institutions expressed their interest in participating in the financial intermediation of the electricity access scale-up project component being implemented by UECCC. Similarly, I have also been informed that 125 energy service companies expressed interest in partnering with UECCC for this very project," she added.    

The minister further noted that the program will equally contribute to the National Electrification Strategy of having 50% of Ugandans expected to be connected on-grid while 50% using off-grid solutions by 2030.        

UECCC Managing Director Roy Nyamutale Baguma noted that the company is well positioned to pool resources from the government and development partners and to channel the same to catalyse financing for the development and implementation of renewable energy projects and access.

A digital platform developed with German-based firm, A2AI (Access to Energy Institute) will facilitate transparency and efficiency in processing claims and payments. The platform is integrated with the National Identification and Registration Authority Uganda (NIRA) and plans to connect with mobile payment systems. 

Joseph Kapika Senior Energy Specialist at the World Bank says that they are prepared to support this program, which aligns with their mission to promote sustainable development. 

The RBF program covers a wide range of technologies in three categories, including off-grid Solar Products (OGS), This includes solar lamps, home systems, and other solar-powered devices. Subsidies will cover up to 60% of the cost for solar lanterns and 50% for solar home systems. Clean Cooking Solutions (CCS): Subsidies ranging from 30% to 50% will be offered for various cookstoves, biogas solutions, and electric cooking devices, helping households transition to cleaner cooking methods. 

Productive Use of Energy (PUE): Solar-powered water pumps, refrigerators, grain milling machines, and on-grid devices for small businesses will benefit from a 60% price reduction. Ugandan citizens are eligible for the program by presenting a valid National Identity Card (or NIN number in its absence). Refugees living in Uganda’s refugee-hosting districts can also access these subsidies with a valid Refugee Identity Card.    

The program will be facilitated by a network of energy service companies that have been pre-qualified to supply the subsidized products. Following the launch, UECCC will hold regional awareness campaigns to highlight the benefits of adopting clean energy.