Uganda Seeks Middle Position on Climate and Petroleum Exploitation

Dr Minchael Mugerwa, General Manager, Uganda Refinery Holdings Lts says the world should recognise Uganda's right to exploit her resources because it is aware of the impact petroleum production can have on the environment.
24 Nov 2021 19:04

Audio 5

Uganda’s oil sector leaders fear that the global way against the exploitation of petroleum resources are affecting the investment prospective into the country, but insist that the country be left to make its own decision about the question of climate and oil. 

The climate crusaders and conservationist organisations want an end to petroleum and coal production, and western governments and lenders are staying away from funding such programs. 

African countries, which according to analyses contribute less than 5 percent of the dangerous global emissions, are at a greater loss risk since many are still developing their oil and gas industries. 

Uganda insists that it will go ahead with the road towards oil and gas production, while also participating in the migration to renewable energy and green economy, like use of solar, wind and geothermal, as well as to electrification of the motoring industry. 

Dr Michael Mugerwa, the General Manager Refinery and Kabaale Industrial Park at Uganda National Oil Company Limited, says however, that they are mindful of the danger of petroleum’s contribution to carbon emissions and efforts include balancing these two.

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Speaking at a dialogue called by the Equity Group Foundation to chart ways of financing climate projects in Uganda, Mugerwa said the bigger chunk of Uganda’s carbon emission is caused not by the petroleum, but by burning of biofuels like firewood, followed by industries. 

According to him, use of firewood and charcoal is boosted by high costs of alternatives like light petroleum gas, LPG, as well as availability of wood.

Mugerwa says that even then, the policy being developed at the Ministry of Energy has provisions that will see a reduction in the use of firewood and charcoal and boosting LPG of which currently the country uses about 30,000 tons per day.

LPG use is also expected to be boosted when Uganda starts producing oil, according to Dr Mugerwa.  

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Specioza Ndagire, the managing Director of the Uganda Energy Credit Capitalisation Company, says firewood alone contributes more than 78 percent of Uganda’s primary energy consumption. 

She attributes the low uptake of renewable energy solutions to the high costs of acquisition, lack of available financing for such solutions and poor funding proposal techniques, while the service providers hardly offer after-sale services to ensure customer sustainability.

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Equity Bank wants the funding for climate projects like tree-planting, renewable energy solutions and other emission reducing programs, streamlined and integrated in the main financing products by the financial institutions. 

The bank wants to replicate what has happened in Kenya in Uganda too, including involving financing renewable energy products in high energy consumer areas like schools. 

Eric Naivasha, the Associate director for Energy, Environment and Climate Change at Equity says schools destroy 1 million trees per month for energy and this should be reversed.

He wonders why uptake of renewable energy products have remained low, and is worried that Africa’s financial and energy sectors might fail to take advantage of the billions of dollars that were offered at the climate conference in Glasgow (COP 26). 

"There was a lot of money committed to Africa in Glasgow but are we ready to receive that money?" asks Naivasha. "How organised we are on the ground to take advantage of that, is very important."

He adds that Equity is taking the lead to finance renewable energy projects, but adds that many Ugandans are still not interested because of lack of knowledge. 

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The UNDP pledged to help Uganda access climate finances at the global stage, saying that though African countries contribute the least to global emissions, they are suffering the most.

Sheila Ngatia Deputy Resident Representative, UNDP Uganda says the whole continent lacks the capabilities and the resources to adequately respond to the enormity of these climate challenges. 

“As the UN in Uganda, we supported the government of Uganda and other stakeholders in the preparation for Uganda’s engagement in COP 26,” said Ngatia.  


She expressed the concern of the UN that developed countries have failed to honour funding promises to Africa made two years ago, but added that this means Africa has to do more to fund its own programs. 

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The State Minister for Energy, Okaasai Sidronius Opolot said the country will continue researching into solutions that allow the exploitation of the country's resources in a way that preserves the environment, which is less costly than dealing with the effects.

"As a country, our energy transition must focus on exploiting our energy resources in a  sustainable and balanced manner considering our endowment with renewable energy resources and hydro carbons," he said.