Elemental Energy holds a license to construct a 7MW Nyamabuye Hydropower Project on River Kaku in Kisoro district, South Western Uganda.
The Director of Elementary Energy Limited (EEL) Shane Gloria Musanase
was on Thursday grilled over the license dispute in the construction of a Nyamabuye
hydropower project on River Kaku in Kisoro district.
Elemental Energy holds a license to construct a 7MW Nyamabuye
Hydropower Project on River Kaku in Kisoro district, South Western Uganda. The
project is to cost USD 27 million.
In July 2019, ERA issued a license revocation notice to the company saying it
“was unlikely to fulfil its obligations under the license”. ERA gave the
company 45-days to show cause why the license shouldn’t be
In November, the Electricity Disputes Tribunal issued an injunction
stopping ERA from cancelling the license of the Power Company. The tribunal ruled that the cancellation be stayed until complaint
Elemental Energy filed against ERA at the tribunal has been disposed of.
In 2018, the company missed a key date for financial closure –
where financial arrangements are completed – but it asked for an extension to
complete negotiations with financiers. But ERA refused to approve the company’s
equity arrangement, claiming the partner Elemental was choosing had many
uncompleted projects they were undertaking in Uganda.
The company decided to petition the tribunal to compel the regulator to approve
the partner to pave way for the financial close to happen.
On Thursday, the tribunal at its first hearing at Amber House in
Kampala resolved that Musanase presents vital evidence of certified bank
statement and proof of shareholders documents.
Joseph Byamugisha representing ERA grilled Musanase around key issues of
financial ability of Elementary Energy limited to complete the dam project, its
shareholders and partners.
ERA is also dissatisfied with EEL’s background in handling
projects because, after its incorporation on 9th April 2010, it has not done
any tangible work apart from planning and applying for a renewable energy
project along with River Kaku.
Asked whether EEL had the funds to complete the Kaku hydro dam
power project, Musanase, said it was not available, prompting Byamugisha to
query whether EEL was credible enough.
However, Musanase told the tribunal that they had resolved to sell
off their license and shares to an Equity Partner Frontier Energy, after an
initial investment of 100 million shillings for the dam construction.
But Musanase said that they had not applied to transfer shares to
The original shareholders of EEL are Elemental limited and Design Group and
Associates, owned by Rowland Sekaziga, Esteri Akandwanaho respectively. They
owned 85% and 15% shares respectively.
Charles Okoth Owor, the tribunal chairperson adjourned the hearing
to October 6th 2020.
Other members of the tribunal are Eng. Paul Mubiru, and Anaclet