GET FiT Uganda - Annual Report 2018

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2018

This report including all content and

illustrations has been prepared by

In cooperation with:

GoU and KfW | Multiconsult

MESSAGE FROM MEMD

GET FiT Uganda | Annual Report 2018

The Ministry of Energy and Mineral Development (MEMD) is a proud partner of the GET FiT Uganda Programme

and is happy to see that the Programme is setting an example for successful public private partnerships in Uganda.

The Programme’s portfolio of 17 small renewable energy projects distributed across the country contributes to

national grid stability and promotion of the Government’s universal access agenda.

In 2018, the Programme has continued to achieve important milestones through the commissioning of four more

hydropower projects. GET FiT Uganda now has 10 out of 17 projects commissioned, and the operational projects

contributed over 250 GWh of energy to the national grid in the last year. While the full evacuation of some projects

remains an issue that must be further resolved, the Programme has demonstrated good value for the Ugandan

power sector.

The MEMD looks forward to continued cooperation with GET FiT and its development partners in the coming years

– and is proud to be a pioneer in demonstrating the successful implementation of the GET FiT concept, serving as

an example for future roll-outs of GET FiT in other countries. As future GET FiT Programmes are implemented, the

MEMD is happy to share its experiences and lessons learned in Uganda.

Robert Kasande

Permanent Secretary of MEMD

“The MEMD looks forward to continued cooperation with GET FiT

and its development partners in the coming years and is proud to

be a pioneer in demonstrating the successful implementation of the

GET FiT concept.”

GoU and KfW | Multiconsult

GET FiT Uganda | Annual Report 2018

MESSAGE FROM NORWAY

The year 2018 has been an exciting one for the GET FiT Programme. Four more hydropower plants with a total

capacity of 29 MW were commissioned and we congratulate the Government of Uganda, the Programme’s

development partners and the project developers on this achievement. In addition, important improvements of

the grid infrastructure commenced during the second half of the year, which will improve the grid integration of

the portfolio and have a lasting impact on the country’s electricity sector and access targets.

For me personally, 2018 was a very special year in the GET FiT Programme, since I was present at the inauguration

ceremony of the Nkusi hydropower project on the 11th of October. This remarkable story started with a walk in

the Rwenzoris by some petroleum engineers based in Stavanger, Norway, a few years ago. They came up with an

idea, followed by a lot of innovation, courage and nancial guts. The engineers’ ideas coincided with the roll-out

of the GET FiT Programme, and the rest is history. Nkusi is also an excellent example of job creation and “local

content”. The site team included Ugandans, South Africans, Peruvians and Norwegians, with 93-94 % Ugandan site

sta in the nal stages. The construction was challenging and involved drilling and blasting a 900 m long tunnel.

In addition to the GET FiT Programme, Norway has funded essential infrastructure for the distribution and

transmission of electricity. During 2018, the high voltage line from Nkenda to Hoima was commissioned, nanced

with a USD 35 million grant. The 225 kilometres line is a key part of the national electricity infrastructure, facilitating

electricity evacuation and more ecient transmission from the power stations.

The great progress of the GET FiT Programme so far also comes with certain obstacles that need to be addressed

and observed closely in the coming months. A timely completion of the grid infrastructure reinforcements is

a central element that determines the successful commissioning of the remaining portfolio of projects under

construction. On a sector level, a generation surplus is emerging, which will require signicant eorts to increase

demand and develop export routes.

The GET FiT Programme has demonstrated a successful Public Private Partnership in the development of Uganda’s

energy sector – serving as an example for future GET FiT Programme designs. Norway is pleased to see that the

GET FiT Programme is now also being rolled-out in other countries.

Susan Eckey

Ambassador of Norway

“The GET FiT Programme has demonstrated a successful Public

Private Partnership in the development of Uganda’s energy sector

– serving as an example for future GET FiT Programme designs.

Norway is pleased to see that the GET FiT Programme is now also

being rolled-out in other countries.”

GoU and KfW | Multiconsult

EXECUTIVE SUMMARY

GET FiT Uganda | Annual Report 2018

elivering infrastructure and energy. The GET

FiT Uganda Programme made substantial

progress in 2018. Four new hydropower

projects with a total capacity of 29 MW were

commissioned during the year, thus increasing the total

installed capacity of the GET FiT portfolio to 87.1 MW.

A total of ten projects, including seven hydropower

projects, two solar projects and one bagasse project,

are now operational and delivering renewable energy

to the Ugandan grid. Overall, GET FiT projects generated

a total of 271 GWh during 2018, corresponding to

approximately seven percent of the total grid electricity

supplied in the country.

Saving money with renewable energy. According to

the system operator (Uganda Electricity Transmission

Company Ltd. – UETCL) power from GET FiT projects

represented a critical contribution in meeting national

electricity demand over the past year. Due to delayed

commissioning for Uganda’s planned, large hydropower

plants, and increasing demand for exports to Kenya

due to problems with regional supply on its side of the

border, UETCL has experienced a general shortage of

supply and has been forced to dispatch thermal (HFO)

plants to meet demand. Access to clean renewable

energy delivered from GET FiT projects reduced the

need for expensive thermal power, and contributed

to estimated savings of more than USD 20 million and

180 000 tonnes in greenhouse gas (GHG) emission

reductions in 2018.

With the expected commissioning of up to six additional

hydropower projects in 2019, and ongoing eorts

to resolve grid related issues for operational plants,

the overall energy generation from the portfolio is

expected to increase substantially in 2019. Depending

on the commissioning of non-GET FiT power plants, it is

expected that the entire portfolio could contribute up

to 18 % of the total electricity generation in Uganda in

the interim period.

Investment Climate. GET FiT Uganda has clearly

demonstrated its potential for private sector

development. It is not only contributing through

the development of additional, technologically and

geographically diversied renewable energy capacity

in the country, but has also had a considerable impact

on the overall power sector of Uganda. As of 2018,

the Programme has leveraged over USD 450 million in

private investments, including USD 160 million of private

commercial nancing. After closing the GET FiT funding

window, the private sector interest in renewable energy

development has remained very high in Uganda, with a

range of solar, hydro and biomass projects now being

developed without subsidies.

Job creation. With a continued high level of construction

activities in 2018, job creation from the portfolio

continues to be substantial. Since the Programme was

launched in 2013, an accumulated total of over 8,500

jobs have been created through the project portfolio,

with nearly 90 percent of those jobs being occupied by

Ugandan sta. This refers to direct jobs only, associated

with development construction and operation of

the respective power plants. The potential indirect

job creation due to e.g. local economic growth is not

included but is expected to be signicant.

Additionally, while long-term eects of the Programme

are still to be observed, indications of increased sector

and regulatory capacity can already be reported in

2018: ERA has reported substantially reduced review

and processing time of generation licence applications,

as well as increasingly timely and complete reporting

of licensees. The strengthened capacity of ERA not

only benets development of small IPPs, but also the

Ugandan power sector as a whole.

Portfolio output and performance. The operational

part of the GET FiT portfolio (87.1 MW) is distributed

across 47.1 MW in hydropower projects, 20 MW in

solar PV projects and 20 MW in bagasse. The portfolio

delivered a total of 271 GWh to the Ugandan grid in

2018:

• For the hydropower projects, both in Western and

Eastern Uganda, a normal hydrological year was

experienced, which under normal circumstances

would have led to normal production levels.

However, four hydropower projects were only

commissioned in mid-2018, which reduced the

overall annual output on a full year basis. In addition

to this, grid constraints have hindered full power

evacuation in some cases.

GoU and KfW | Multiconsult

• For the two solar projects in Eastern Uganda, Soroti

(10 MW) and Tororo (10 MW), a normal year was

experienced with respect to solar insolation and

normal production levels were achieved. The GET

FiT solar projects arguably have paved the way for

Uganda’s solar energy adventure, which continued

through the commissioning of an additional 20 MW

of grid-connected solar PV in 2018. A range of other

projects are under development by commercial

investors.

• For the Kakira bagasse co-generation plant (20

MW), energy generation was doubled in 2018 after

several years of severe shortage of sugar cane

supply. However, the current generation levels are

still only at 60 percent of planned generation. Some

further improvement is expected in 2019 due to

anticipated increase in Kakira’s own cane supply.

Construction progress. Most of the remaining seven

hydropower projects which are still under construction

are expected to be commissioned in 2019. One or two

will be completed in 2020. Actions were taken by the

Programme to minimise commissioning delays beyond

the original 2018 funding window, including additional

supervision visits, and application of incentives

such as nancial penalties in the form of subsidy

reductions. While developers certainly have made

substantial eorts, poor progress on certain design

and construction works might lead to further delays for

some projects. Active GET FiT supervision and assistance

will therefore be maintained in the upcoming year for a

continued push towards a fully commissioned portfolio

including close monitoring of environmental and social

compliance.

Grid Integration. The successful grid integration of the

portfolio remains a challenge for the Programme, both

in terms of full evacuation of commissioned projects

and the development of grid connection infrastructure

for projects under construction. GET FiT Uganda

development partners have provided considerable

additional funding towards important investments

in the reinforcement of the national and local grid

infrastructure to facilitate power evacuation from

GET FiT projects. While contractors were mobilised

in 2018 for some of the most critical components,

other reinforcement needs are still not properly

addressed. This represents an operational, nancial

and reputational risk to the Ugandan power sector and

to the GET FiT Programme. GET FiT maintains a close

dialogue with the Government of Uganda agencies to

facilitate high-level attention and coordination in fast-

tracking the grid infrastructure which will continue in

the forthcoming year.

Technical Assistance. Two Technical Assistance

components for the Electricity Regulatory Authority

(ERA) were concluded in 2018. A new framework

for licensee reporting was put in place, and a new

regulation for determining nancial and economic

returns for licensees in the power sector was

established. The latter will greatly improve ERA’s ability

to conduct constructive negotiations with entities that

want to invest in power sector infrastructure in Uganda

and to ensure levels of returns that are economically

viable to the benet of Ugandan consumers, while also

reecting benchmark costs and maintaining private

GET FiT Uganda | Annual Report 2018

sector attractiveness. Another milestone project for ERA

is the implementation of a new Regulatory Information

Management System (RIMS). The digitalisation of core

ERA processes, including licence applications and

reporting, will further cement the position of ERA as

one of the most progressive power sector regulators

in Africa. Further, as part of a twinning arrangement,

ERA and the Implementation Consultant (Multiconsult)

are developing checklists and guidance documents

for institutionalisation at ERA, papers for international

publications, and are in continued dialogue on key

technical, environmental and social issues of power

projects. This knowledge transfer is a key element of

the GET FiT exit strategy.

Outlook. 2019 will surely be an exciting yet challenging

year for the Programme, with up to six of the seven

remaining hydropower projects set for commissioning.

These will require close follow up, particularly related

to implementation of adequate grid infrastructure. GET

FiT grid interventions are due for completion during

the year, which will positively aect the evacuation

of operational plants and increase the portfolio’s

generation. To ensure a timely implementation

process, GET FiT will continue to push stakeholders on

fast-tracking critical grid upgrades in 2019.

The Ugandan power sector appears more vibrant than

ever, with a booming interest from the private sector.

The successful implementation of seventeen IPPs

under GET FiT has clearly set a new standard for what

is possible with private sector mobilisation, thereby

freeing up scarce public resources in times of rising

debt. Notably, and highly encouragingly, there is now

an increasing interest from the private sector in other

areas of the power sector as well, e.g. for development

of transmission projects, large power plants, and

o-grid electricity development. Although there are

many challenges ahead, such as a growing generation

surplus, and uncertainties remain, the general private

sector interest is good news for Uganda and bodes well

for exciting times ahead.

With continued, targeted eorts at the project level and

sector level, the overall impact of the GET FiT Programme

will be further strengthened in the upcoming year. The

diverse project portfolio will, more than ever, oer

aordable renewable energy to Ugandan consumers,

contributing to clean and sustainable power sector

development, improved security of power supply,

power quality and grid stability.

GoU and KfW | Multiconsult

“The Waki hydro project plays a big role in meeting the rising demand of energy in the

Mid-Western Region and contributes to Environmental, Social and Economic Sustain-

ability. It will increase the supply and provide energy for regional and local economic

development, thus improving the quality of life for rural communities - especially those

of Waki, Butiaba Landing sites, Wanseko and Bulisa villages.

The developers of the project wish to extend their appreciation towards all stakeholders,

the GET FiT fund support and the Implementation Consultant for their support of the

project and cooperation, which has yielded an orderly completion of project develop-

ment. The developer pledges its cooperation during operations of the power plant – and

looks forward to working together with GET FiT in the development of other projects.”

Godfrey Sentumbwe

General Manager - Hydromax (Nkusi) Ltd.

Waki Hydro Project

GET FiT Uganda | Annual Report 2018

GET FiT PORTFOLIO

RE Projects

158 MW

765 GWh/y

118 MW

Hydro Solar Bagasse

585 GWh/y

20 MW

34 GWh/y

20 MW

147 GWh/y

Projects Commissioned

55%

Capacity Installed

Of Portfolio

Capacity Installed

(MW)

Hydropower Bagasse Solar PV

Uganda

89%

8,568

Jobs Created

Ugandan Employment

2K0K

2014

2015

2016

2017

2018

FemaleMale

4.5

453

GET FiT

Leverage Ratio

Million USD in Private

Investments Leveraged

GET FiT Grants Private Financing Public Financing

$291M$162M$100M

GoU and KfW | Multiconsult

TABLE OF CONTENTS

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ABOUT GET FiT UGANDA

PROJECT PORTFOLIO STATUS

ENVIRONMENTAL AND SOCIAL

PERFORMANCE

GRID CONNECTION STATUS AND CHALLENGES

ACADEMIC CORNER

LESSONS LEARNED

OTHER ACTIVITIES

FINANCIAL STATUS

PROGRAMME MONITORING & RISK MANAGEMENT

OUTLOOK FOR 2019

GET FiT Uganda | Annual Report 2018

GoU and KfW | Multiconsult

GET FiT Uganda | Annual Report 2018

LIST OF ABBREVIATIONS

/ ACRONYMS

COD Commercial Operation Date

CP Condition Precedent

BEIS Department for Business, Energy & Industrial Strategy

DFA Developer Finance Agreement

DFID Department for International Development, UK

EPC Engineering, Procurement and Construction (a form of contract)

ERA Electricity Regulatory Authority

E&S Environmental and Social

ESIA Environmental and Social Impact Assessments

ESMP Environmental and Social Management Plan

ESAP Environmental and Social Action Plan

EU ITF European Union Infrastructure Trust Fund

GFPPM GET FiT Premium Payment Mechanism

GHG Greenhouse Gas

GoU Government of Uganda

GWh Gigawatt Hours

HFO Heavy Fuel Oil

HV High Voltage

IA Implementation Agreement

IC Investment Committee

IDA International Development Association

IFC International Finance Corporation

IPP Independent Power Producer

KfW Kreditanstalt für Wiederaufbau

LRP Livelihood Restoration Plan

MEMD Ministry of Energy and Mineral Development

MoFPED Ministry of Finance, Planning and Economic Development

M&E Monitoring & Evaluation

MtCO2e Million Tonnes of Carbon Dioxide Equivalent

MW Megawatts (of installed power capacity) 1 MW = 1000 kilowatts

GoU and KfW | Multiconsult

MV Medium Voltage

PAP Project Aected Person

PPA Power Purchase Agreement

PPP Public-Private Partnership

PRG Partial Risk Guarantee

PS Performance Standards (IFC)

RAP Resettlement Action Plan

RE Renewable Energy

REA Rural Energy Agency

RFP Request for Proposal

RFQ Request for Quotation

RoE Return on Equity

SC Steering Committee

SHP Small Hydropower Plant

SPCC Sector Planning and Coordination Committee

SSA Sub-Saharan Africa

TA Technical Assistance

UEDCL Uganda Electricity Distribution Company Limited

UETCL Uganda Electricity Transmission Company Limited

GET FiT Uganda | Annual Report 2018

he GET FiT Uganda Programme was ocially

launched on May 31st, 2013. The Programme,

which has been developed by the Government

of Uganda and the Electricity Regulatory Authority

(ERA), in close cooperation with KfW Development

Bank, is designed to leverage private investment into

renewable energy generation projects in Uganda.

GET FiT is being supported by the Governments of

Norway, the United Kingdom, Germany and the EU

through the EU Africa Infrastructure Fund.

The main objective of the GET FiT Programme is to

assist Uganda in pursuing a climate resilient low-

carbon development path resulting in growth,

poverty reduction and climate change mitigation by

facilitating private sector involvement and improving

the framework conditions for private investments

in renewable energies. In Uganda, GET FiT is fast-

tracking a portfolio of 17 small-scale renewable

energy (RE) projects, promoted by private developers

and with a total installed capacity of 158 MW. This

will yield approximately 765 GWh of clean energy

production per year, transforming Uganda’s energy

mix within a period of 3-5 years, and resulting in:

About

GET FiT Uganda

• Emission reductions of roughly 10 million tonnes

of CO2 in the 20-year lifespan of Power Purchase

Agreements (PPAs).

• An increase in Uganda’s energy production by

about 20 %, and thus a contribution to tackling an

anticipated supply shortage in the period up to

2020.

• Facilitating (or signicantly improving) access to

energy for at least 200,000 additional households

(approximately 1.2 million people) due also, in rural

areas, to strengthening of regional grids.

• Leveraging of more than USD 450 million in public

and private investments for renewable energy

(RE) generation projects with a limited amount of

results-based grant funding.

A more comprehensive description of the specic

tools and approaches applied by GET FiT to address

the challenges faced in the Ugandan power sector, the

governance structure of the Programme and, key activities

and achievements so far, is found in the GET FiT Annual

Reports produced since 2013 (www.gett-reports.com).

GoU and KfW | Multiconsult

GET FiT Uganda | Annual Report 2018

further four small hydropower projects (SHP)

achieved commercial operation during 2018

– Nyamwamba SHP, Lubilia SHP, Nkusi SHP,

and Waki SHP – adding an additional 29.0

MW of power capacity to the Ugandan grid. Combined

with the six projects already operational by the end of

2017, the total installed capacity of operational GET FiT

supported projects is now 87.1 MW – approximately

55 % of the total installed capacity to be implemented

under the Programme (158.4 MW).

As a result, GET FiT supported projects supplied 271 GWh

to the grid during 2018, corresponding to approximately

seven (7) percent of the total grid electricity supplied

in Uganda. Cumulatively, the overall power supplied to

the Ugandan grid by GET FiT supported projects thus

far has totalled more than 410 GWh, equivalent to a

saving of approximately 450,000 tonnes of CO2 due to

displacement of power production from fossil fuelled

electricity production.

Construction progress during 2018 was again noticeably

variable across the portfolio, with some developers and

projects performing substantially better than others.

GET FiT continued to more closely monitor progress

of the remaining projects and tried to incentivise

developers to complete construction and enable

commissioning in a timely manner. For selected projects

this included increasing the frequency of supervision

visits at the cost of the developer; enforcing stops in

construction where there were clear deciencies in the

developers’ capacity to plan and implement the projects

in a timely, safe, and responsible manner; and imposing

reductions in the overall subsidy amount allocated to

the project where there was continued non-compliance

with Programme requirements.

Several SHP’s were requested to partially stop

construction during the rst half of 2018 due to

excessive levels of damage caused by construction

approaches in steep terrain and close to rivers, or the

risk of such damage due to the proposed construction

approaches. Three of the projects modied their

construction methodologies and/or the design of key

project structures signicantly, which was welcome

in terms of minimising adverse impacts but resulted

in programme delays, which were necessary in order

to plan and implement the alternative approaches.

A further project also experienced delays due to

a naturally occurring landslide, which resulted in

important design changes to improve the robustness

of key project structures.

Two of the projects received a nancial penalty during

the rst half of 2018 in the form of a subsidy reduction,

a contractual mechanism used to improve compliance

of the developers. These projects had received a

warning of another subsidy reduction, in order to

improve performance and construction practices and

to minimise as far as reasonably possible adverse

environmental and social impacts. For both projects,

the threat of further subsidy reductions persists into

Q1 2019. One project, which had already experienced

substantial delays due to transboundary coordination

issues, experienced a major setback as the Developer

replaced the EPC Civil Contractor during the rst half

of 2018.

Project

Portfolio Progress

Portfolio Status

2.1

Progress

Challenges in 2018

No.

1 Rwimi

Nyamwamba

Waki

Siti I

Siti II

Lubilia

Kakira Cogen

Sindila

Muvumbe

Soroti Solar

Tororo Solar

Kikagati

Ndugutu

Kyambura

Q2 2019

Q4 2015

Q3 2015

Q1 2016

Q2 2012

Q2 2015

Q1 2015

Q3 2016

Q2 2018

Q4 2017

Q2 2018

Q2 2014

Q1 2019

Q2 2017

Q4 2016

Q3 2017

Q2 2020

Q1 2020

Q3 2019

Q2 2018

Q2-Q3 2019

Q4 2018

Q2 2017

Q1 2017

Q3 2015

Q1 2016

Q1 2017

Q4 2017

Q1 2017

Q2 2017

Q3 2017

Q2 2015

Nkusi

Nyamagasani 1

Nyamagasani 2

Project

Developer

Financing

Agreement

(DFA)

Power

Purchase

Agreement

(PPA)

Financial

Construction

Start

Commissioning

Generation

Licence

GoU and KfW | Multiconsult

The Finishing Line

With most of the remaining projects on the home

straight to achieving commercial operation in the

coming year, the majority of planned GET FiT supported

projects will be supplying the grid before the end of

2019.

The remaining seven SHPs still to achieve commercial

operation are Kikagati, Kyambura, Ndugutu,

Nyamagasani 1 and 2, Sindila, and Siti 2 SHPs. For these

projects, key design decisions had largely been resolved,

construction was well underway, and the procurement

of critical equipment and materials had either been

completed or was well advanced. Nonetheless, a

considerable volume of construction works was still

to be completed and several projects have challenges

still to overcome. The timely implementation of power

Based on GET FiT estimates when developers are likely to complete commissioning tests.

As acknowledged in the 2017 Annual Report, GET FiT recognises the unique transboundary challenges experienced by the Kikagati SHP and the resulting impact on the imple-

mentation timeframe. Delays were further exacerbated during the rst half of 2018 by key changes in contracting arrangements – further details are provided in Section 2.2.

evacuation infrastructure, to connect the projects to

the grid and ensure reliable evacuation continues to be

a major issue for many of the remaining projects.

Table 1 summarises the status of key project milestones

across the portfolio. Milestones that have been achieved

are indicated by check marks, whereas the remainder

are shown by the white or grey cells. The expected dates

for key milestones that have not yet been achieved are

shown. As indicated, most of the remaining projects

are aiming to achieve commercial operation by the

middle of 2019, whereas the experience of the GET

FiT team and observed progress and capacity of the

developers during 2018 indicates that some projects

will be extended to much later in 2019 before achieving

commercial operation.

Table 1 – Project Milestones Overview

GET FiT Uganda | Annual Report 2018

Consequences of Achieving COD

during 2019

As outlined above, several GET FiT supported SHPs

did not achieve commercial operation before the

end of the 2018 calendar year, the end of the original

window for GET FiT support. The GET FiT Steering

Committee therefore resolved that, at the discretion

of the GoU, represented by KfW, the contractual

deadline for achieving commercial operation would

be extended from 31 December 2018 to 31 October

2019. Furthermore, in order to incentivise developers

to achieve commercial operation as early as possible

during 2019, the following would apply:

• The Steering Committee decided in 2018 that no

disbursements of subsidy payments will be made

after 2023 and therefore projects that achieve COD

after 2018 will be subject to subsidy reductions.

• Developers would be required to cover any

additional costs resulting from the continued follow-

up and supervision of their individual projects by

GET FiT beyond 2018.

Expected Portfolio Output

An overview of the total planned installed capacity

of the portfolio and how it is distributed across the

supported technologies is presented in Figure 1. The

overall portfolio capacity amounts to a total of 158.4

MW, representing approximately 93 percent of the

original Programme target of 170 MW. The dierence

between the planned capacity of the current portfolio

and the original targets is partly due to a reduction in the

overall Programme funding in earlier years combined

with a lower share of bagasse/biomass than originally

anticipated. Nonetheless, adding an installed capacity

of more than 150 MW to the Ugandan electricity supply

network is a signicant achievement and truly reects

the successful impact of the GET FiT Programme.

Figure 1 - GET FiT Portfolio Build Up

GET FiT Portfolio Build Up

MW GWh/year

SOLAR

BAGASSE

HYDRO

158.4 MW

SOLAR

BAGASSE

HYDRO

765 GWh/year

Schematic Representation of Merit Order (as of 2018)

Excluding GET FiT Portfolio

Including GET FiT Portfolio

Large Hydro

Small Hydro

Bagasse

Capacity in MW

Price in USc Price in USc

GET FiT

Thermal

GoU and KfW | Multiconsult

Figure 2 provides a schematic illustration of the merit

order eect of the GET FiT portfolio at the end of 2018

(includes the current installed capacity of 87.1 MW).

The merit order eect refers to the reduction of highly

priced peak energy that the utility needs to buy: As

indicated in the graph, the GET FiT portfolio (green area)

is o-setting expensive thermal generation (grey area)

that is associated with high GHG emissions. Due to GET

FiT approximately 13 % of total generation capacity has

been added, thereby reducing generation from the

heavy fuel oil (HFO) plants in the country.

Figure 2 – Schematic Representation of Uganda’s Merit Order and the Eect of the GET FiT Portfolio

Note: The merit order eect is expressed in marginal energy price, not average energy price. Both thermal power plants have 7 MW generation guaranteed in

their PPA. Additionally, most powerplants have take-or-pay PPAs. Therefore, the illustration is only a schematic representation of the eects, based on ERA data.

GoU and KfW | Multiconsult

GET FiT Uganda | Annual Report 2018

Projects

2.2

Hydropower Bagasse Solar PV

Waki HPP

Soroti

Siti II HPP

Siti I HPP

Tororo

Kakira

Nkusi HPP

Sindila HPP

Ndugutu HPP

Rwimi HPP

Lubilia HPP

Kyambura HPP

Kikigati HPP

Muvumbe HPP

Nyamwamba HPP

Nyamagasani

I + II HPP

Uganda

GoU and KfW | Multiconsult

Figure 3 - Map of GET FiT Portfolio

In the following sections, the projects of the GET FiT portfolio will be described in more detail, highlighting notable

developments and project generation

in 2018. Figure 3 provides an overview of the location of the respective

projects of the portfolio.

Generation data is presented as provided by developers. The accuracy and appropriateness of the generation levels presented in the following sections will be reviewed by

GET FiT only upon submission as per contractually agreed procedures.

GET FiT Uganda | Annual Report 2018

his run-of-river hydropower plant is located in Bukwo

District in Eastern Uganda. The Project commenced

construction in February 2015, started evacuating power to

the grid during May 2017 at reduced capacity due to issues

with the quality and stability of the power evacuation line, and

formally achieved its commercial operation date (COD) in August

2017 following improvements to the line.

During 2018, the rst full calendar year of operation, the Project

delivered 19.7 GWh of energy to the grid. Substantial grid failures

and outages continued throughout 2018 and were approximately

equivalent to 26 % of the potential plant output (energy delivered

plus deemed energy), which is especially high. The long-term power

evacuation solution for the Siti 1 SHP, and the Siti 2 SHP further

downstream comprises a new 132 kV transmission line between

Mbale and Bulambuli, which is expected to substantially improve

the reliability of power evacuation from the plant. The line is not

expected to be completed before 2021.

Adjusting for the partial availability of the power evacuation line,

the cumulative energy output of the plant during 2018 would

instead have been 26.6 GWh, approximately equivalent to 106 % of

the average energy estimated at application stage. Combined with

the output generated in 2017, the Project has so far delivered a

total of 31.1 GWh to the Ugandan grid.

Figure 4 - Siti 1 SHP - Planned versus Actual Energy Output (2018)

25 25 25

Hydro

6.1

25.0

15.0M

3.6M

Capacity

(in MW)

Planned

Generation

(in GWh/year)

Total

Investment

(in USD)

GET FiT

Commitment

(in USD)

Annual Generation

(in GWh)

Operational

Siti 1

Uganda

201920182017

Deemed Energy (GWh)

Planned Energy (GWh)

2020 2021

GoU and KfW | Multiconsult

his run-of-river hydropower project is located in Kabale

District in South-Western Uganda. The Project commenced

construction in September 2015 and achieved its COD by

mid-May 2017.

During 2018, the rst full calendar year of operation, the Project

delivered 28.1 GWh of energy to the grid. Grid failures and outages

were approximately equivalent to 12 % of the potential plant output

(energy delivered plus deemed energy), slightly lower than the 14

% observed during 2017, but still relatively high. Adjusting for the

partial availability of the power evacuation line, the cumulative

energy output of the plant would instead have been 31.8 GWh,

approximately equivalent to 101 % of the average energy estimated

at application stage. Combined with the output generated in 2017,

the Project has so far delivered a total of 50.0 GWh to the Ugandan

grid.

31 31 31

Figure 5 - Muvumbe SHP – Planned versus Actual Energy Output (2018)

Muvumbe SHP

Operational

Hydro

6.5

31.0

12.5M

4.5M

Capacity

(in MW)

Planned

Generation

(in GWh/year)

Total

Investment

(in USD)

GET FiT

Commitment

(in USD)

Annual Generation

(in GWh)

Uganda

201920182017 2020 2021

Deemed Energy (GWh)

Planned Energy (GWh)

GET FiT Uganda | Annual Report 2018

his run-of-river hydropower project is located in Kasese

and Kabarole Districts in Western Uganda. The Project

commenced construction in July 2015 and achieved its COD

by mid-October 2017.

During 2018, the Project delivered 28.5 GWh of energy to the

grid. Grid failures and outages were approximately equivalent to

2 % of the potential plant output (energy delivered plus deemed

energy), lower than the 8 % observed during 2017. Adjusting for

the partial availability of the power evacuation line, the cumulative

energy output of the plant would instead have been 29.1 GWh,

approximately equivalent to 108 % of the average energy estimated

at application stage. Combined with the output generated in 2017,

the Project has so far delivered a total of 35.4 GWh to the Ugandan

grid.

Figure 6 - Rwimi SHP - Planned versus Actual Energy Output (2018)

27 27 27

Hydro

5.5

27.0

19.9M

3.9M

Capacity

(in MW)

Planned

Generation

(in GWh/year)

Total

Investment

(in USD)

GET FiT

Commitment

(in USD)

Annual Generation

(in GWh)

Rwimi SHP

Operational

Uganda

201920182017 2020 2021

Deemed Energy (GWh)

Planned Energy (GWh)

GoU and KfW | Multiconsult

his run-of-river hydropower plant is located in the Kibaale

and Hoima Districts in Western Uganda. The Project

commenced construction during October 2015 and

achieved its COD by mid-June 2018.

Since achieving commercial operation, the Project delivered a total

of 29.3 GWh of energy to the grid. During the rst six full months

of operation (from July onwards), grid failures and outages were

substantial and equated to approximately 28 % of the potential

plant output (energy delivered plus deemed energy) due to capacity

constraints in the current distribution grid. The construction of an

alternative power evacuation route towards Hoima is expected to

be completed during Q1 2019, which will enhance the network’s

robustness and likely reduce the outages and the deemed energy

risk to GoU.

Adjusting for the partial availability of the power evacuation line

unavailability, the cumulative energy output of the plant during

2018 would instead have been 37.0 GWh, approximately equivalent

to 131 % of the average energy for the same six-month period of

operation estimated at application stage.

Nkusi SHP

Hydro

9.6

46.0

19.6M

2.8M

Capacity

(in MW)

Planned

Generation

(in GWh/year)

Total

Investment

(in USD)

GET FiT

Commitment

(in USD)

Figure 7 - Nkusi SHP - Planned versus Actual Energy Output (2018)

Annual Generation

(in GWh)

46 46 46

Operational

Uganda

202020192018 2021 2022

Deemed Energy (GWh)

Planned Energy (GWh)

GET FiT Uganda | Annual Report 2018

his run-of-river hydropower plant is located in Kasese

District in Western Uganda. The Project commenced

construction in October 2015 and achieved its COD by the

end of April 2018.

In 2018 the Project delivered a total of 30.4 GWh of energy to the

grid. During the rst eight full months of operation (from May

onwards), grid failures and outages were approximately equivalent

to 6 % of the potential plant output (energy delivered plus deemed

energy) – the lowest outages reported for any of the connected

GET FiT supported small hydropower projects. Adjusting for partial

availability of the power evacuation line, the cumulative energy

output of the plant during 2018 would instead have been 32.9 GWh,

approximately equivalent to 95 % of the average energy estimated

at application stage.

Figure 8 - Nyamwamba SHP - Planned versus Actual Energy Output (2018)

39 39 39

Nyamwamba SHP

Hydro

9.2

39.0

28.7M

5.8M

Capacity

(in MW)

Planned

Generation

(in GWh/year)

Total

Investment

(in USD)

GET FiT

Commitment

(in USD)

Annual Generation

(in GWh)

Operational

Uganda

202020192018 2021 2022

Deemed Energy (GWh)

Planned Energy (GWh)

GoU and KfW | Multiconsult

his run-of-river hydropower plant is located in Kasese

District in Western Uganda. The Project commenced

construction in March 2016 and achieved its COD by early

April 2018.

In 2018 the Project delivered a total of 13.8 GWh of energy to the

grid. During the rst full nine months of operation (from April

onwards), grid failures and outages were approximately equivalent

to 12 % of the potential plant output (energy delivered plus deemed

energy). Adjusting for the partial availability of the power evacuation

line, the cumulative energy output of the plant during 2018 would

instead have been 15.7 GWh, approximately equivalent to 88 % of

the average energy for the same nine-month period of operation

estimated at application stage.

Figure 9 - Lubilia SHP - Planned versus Actual Energy Output (2018)

0.5

1.5

2.5

25 25 25

Lubilia SHP

Hydro

5.4

25.0

16.0M

3.2M

Capacity

(in MW)

Planned

Generation

(in GWh/year)

Total

Investment

(in USD)

GET FiT

Commitment

(in USD)

Annual Generation

(in GWh)

Operational

Uganda

202020192018 2021 2022

Deemed Energy (GWh)

Planned Energy (GWh)

GET FiT Uganda | Annual Report 2018

he Tororo Solar PV project is located just outside Tororo

Town in the Tororo District, Eastern Uganda. The 10 MW

plant has 32,240 solar modules on 14 hectares of land

and became the second grid-connected solar power plant

in Uganda. The Project commenced commercial operations in

September 2017.

The facility operated to expected and forecast performance levels

and showed no major issues or concerns for the rst year of

operations. The Project has not reported any deemed energy in

2018. Total generation during the year equalled approximately 15.8

GWh, in line with the planned annual generation.

The owners, Tororo Solar North Ltd., part of the Building Energy

Group, nished the construction of an Early Childhood Development

Centre which was inaugurated for use by the local community

during December 2018.

Figure 10 - Tororo Solar PV – Planned versus Actual Energy Output (2018)

16 16 16

Tororo Solar PV

Solar PV

10.0

16.0

19.6M

8.0M

Capacity

(in MW)

Planned

Generation

(in GWh/year)

Total

Investment

(in USD)

GET FiT

Commitment

(in USD)

Annual Generation

(in GWh)

Operational

Uganda

201920182017 2020 2021

Planned Energy (GWh)

GoU and KfW | Multiconsult

his Project is located east of the town of Soroti in the

Soroti District, Eastern Uganda, and was commissioned in

November 2016. The Soroti Solar Power Plant has 32,680

solar modules on 13 hectares. It was developed by Access

Uganda Solar Ltd. and has been injecting power to the national grid

for more than two years. At the start of its commercial operation

the 10 MW plant was the rst grid-connected Solar Power Plant in

Uganda and also East Africa’s largest.

In 2018, the plant produced approximately 16.3 GWh. The deemed

energy due to failures from the grid was 0.26 GWh, meaning that the

plant should have produced circa 16.6 GWh in theory (no failures

from the grid). The local Operation and Maintenance team (4 men

and 1 woman) did not report any major events in this second year

since achieving commercial operation and was mostly following

normal operating procedures, both preventive and corrective.

Figure 11 - Soroti Solar PV - Planned versus Actual Energy Output (2018)

17 17

Soroti Solar PV

Solar PV

10.0

17.5

14.3M

9.6M

Capacity

(in MW)

Planned

Generation

(in GWh/year)

Total

Investment

(in USD)

GET FiT

Commitment

(in USD)

Annual Generation

(in GWh)

Operational

Uganda

201820172016 2019 2020

Deemed Energy (GWh)

Planned Energy (GWh)

GET FiT Uganda | Annual Report 2018

he Kakira biomass (bagasse from sugar production)

plant is located in the Jinja District, Eastern Uganda, and

was the rst operational project supported by GET FiT.

Over the past three years the Project has been facing

a reduced availability of sugar cane, caused mainly by increased

local competition in the sugar cane market. To increase supply, the

Developer acquired additional land for sugar cane production in

2017 and 2018. Accordingly, the output has seen a considerable

increase: In 2017 the generation was at 44 GWh, while the plant

generation nearly doubled to approximately 87 GWh in 2018.

The Kakira owners expect a continued increase in energy generation

levels in the nal years of GET FiT support (2019 and 2020), with a

current estimate of up to 120 GWh/year in this period. Notably, in a 3

to 5 year perspective, the Project expects to achieve full production

at 147 GWh/year. They aim to achieve this through additional

land purchases which will increase their share of own cane supply

from today’s 35 percent, up to about 50 percent. Further to this,

the Project is in the process of installing new irrigation systems for

enhanced cane production on parts of the land.

Figure 12 - Kakira Bagasse - Planned versus Actual Energy Output (2018)

147 147

Kakira

Bagasse

20.0

147.0

56.8M

7.1M

Capacity

(in MW)

Planned

Generation

(in GWh/year)

Total

Investment

(in USD)

GET FiT

Commitment

(in USD)

Annual Generation

(in GWh)

Operational

Uganda

201820172016 2019 2020

Planned Energy (GWh)

GoU and KfW | Multiconsult

his run-of-river hydropower plant is located in Hoima

and Buliisa Districts in Western Uganda. The project

commenced construction during 2015 and COD was

achieved in December 2018.

Following an imposed construction stop during parts of 2017 as a

result of slow progress and non-compliance with IFC Performance

Standards and Ugandan regulations, the Developer made

concerted eorts during 2018 to complete the works. Construction

planning and monitoring were substantially improved as the year

progressed and resources were more eectively managed to

meet target rates of construction in order to achieve commercial

operation by the end of the year. This included managing critical

activities and introducing redundancy in key construction plant

and equipment, which had previously impacted progress following

breakdowns.

The second stage river diversion was successfully completed

by the middle of the year and was a major achievement for the

Project, allowing weir construction to be completed, as was the

tunnel breakthrough, through which the headrace pipeline was

subsequently installed.

Capacity

Planned

Generation

4.8

25.0

(in MW)

(in GWh/year)

Total

Investment

GET FiT

Commitment

17.3M

3.6M

(in USD)

Hydro

Waki SHP

Operational

Uganda

GET FiT Uganda | Annual Report 2018

his run-of-river hydropower plant is located in Bukwo

District in Eastern Uganda and commenced construction in

August 2016. The Project has the largest installed capacity

of the GET FiT projects and is the downstream part of the

cascade with the already commissioned Siti 1 SHP, one of only two

cascades in the portfolio.

The Project experienced a set-back during the year as a result

of a landslide on the steep escarpment above the penstock. The

penstock construction access road was blocked by the landslide

and required planning and careful eorts to safely clear the loose

boulders and other material and to secure safe working conditions

for the remaining penstock installation works. Concerns were raised

with respect to the longer-term stability of the escarpment and the

robustness and resilience of key project structures against further

landslides. Consequently, further design reviews were undertaken

and important changes implemented, which also lead to further

delays.

In the long term, power will be evacuated via a new 132 kV

transmission line being planned between Mbale and Bulambuli,

which is not expected to be completed before 2021. In the interim,

a 140 km long 33 kV line is planned, although construction of this

interim solution had not commenced by the end of 2018. With the

remaining construction works expected to be completed during the

rst half of 2019, even the interim solution had become a critical

activity for power evacuation and a deemed energy situation is likely.

For the purpose of commissioning the plant, the Developer planned

to construct a 4.7 km 33 kV line to connect the Siti 2 powerhouse

with the powerhouse of the upstream Siti 1 hydropower project

(also implemented by the Developer and supported by GET FiT, and

already commissioned). Completion of the interconnecting line is

expected by the end of January 2019, with commissioning planned

during Q2.

Capacity

Planned

Generation

16.5

72.0

(in MW)

(in GWh/year)

Total

Investment

GET FiT

Commitment

33.0M

10.2M

(in USD)

Hydro

Siti 2 SHP

Under Construction

Uganda

GoU and KfW | Multiconsult

his run-of-river hydropower plant is located in the Rubirizi

District in Western Uganda. During 2018, irresponsible

construction practices along sections of the headrace

canal resulted in substantial, adverse environmental and

social impacts. Consequently, a nancial penalty was applied in the

form of a subsidy reduction and the Project was threatened with

further nancial penalties if construction practices did not improve.

Regrettably, the environmental damage arising from poor practices

created a barrier to upstream sh migration. The threat of further

subsidy reductions persists into Q1 2019.

The potential to cause further adverse environmental and social

impacts also led to a partial construction stop being imposed, with

the developer requested to reconsider the design and construction

approach in two key locations where the blasting and excavation of

substantial volumes of rock were planned. As a result, the dam and

intake structure were relocated approximately 0.5 km downstream

from the originally planned location, which resulted in an increased

dam height and reservoir footprint and a corresponding reduction

in canal length, as well as the introduction of a substantial canal

aqueduct section. As a consequence, the Project was further

delayed and the construction of the dam is now critical to the

Project achieving commercial operation, which is currently planned

during Q2 2019. The construction of all other project structures had

otherwise progressed well during the year.

Capacity

Planned

Generation

7.6

36.7

(in MW)

(in GWh/year)

Total

Investment

GET FiT

Commitment

24.0M

5.4M

(in USD)

Hydro

Kyambura SHP

Under Construction

Uganda

GET FiT Uganda | Annual Report 2018

his run-of-river hydropower plant is located in Bundibugyo

District in Western Uganda. At the end of 2017 and in

early 2018, the Contractor’s headrace pipeline installation

methodology resulted in substantial adverse environmental

and social damage and the Project was requested to temporarily

stop construction. The Developer and EPC Contractor subsequently

made concerted and commendable eorts to review and revise the

design and construction approach, which resulted in substantially

reduced environmental and social impacts.

Changes included realigning the headrace waterway and adopting

an alternative pipeline installation methodology, leading to a much-

reduced construction footprint. An access track, rather than road,

was constructed to the weir, and construction materials and small

equipment were manually transported to the weir site with larger

materials and small plant transported via a cableway.

The delays experienced due to the earlier construction methodology,

combined with the time taken to re-think and adopt an alternative

construction approach, substantially impacted construction

progress. Nonetheless, by the end of 2018, construction works

had progressed well, and commercial operation was planned

early during Q1 2019. A new 5 km power evacuation line has been

constructed to connect the powerhouse to the existing grid, and

further delays to its implementation may threaten the timely

commissioning of the Project. The existing grid was expected to be

sucient to evacuate the full output of the Sindila SHP subject to

modications to convert it from a distribution only to evacuation

line, which was also planned as a priority.

Capacity

Planned

Generation

5.3

27.0

(in MW)

(in GWh/year)

Total

Investment

GET FiT

Commitment

19.4M

3.9M

(in USD)

Hydro

Sindila SHP

Under Construction

Uganda

GoU and KfW | Multiconsult

his run-of-river hydropower plant is located in the

Bundibugyo District in Western Uganda. The EPC Contractor

is common to both the Sindila and Ndugutu SHP’s, and the

design and construction issues encountered at the Sindila

SHP were similarly experienced at Ndugutu SHP during 2018. The

construction methodology for delivering and installing the penstock

pipeline led to multiple slope failures, slow construction progress,

and substantial environmental and social damage during the latter

part of 2017 and early 2018. Consequently, a nancial penalty

was applied in the form of a subsidy reduction and the Project

was threatened with further nancial penalties if construction

practices did not improve. The threat of further subsidy reductions

persists into Q1 2019 due to the continued substantial risks of

environmental and social damage. Following a request to partially

stop construction, the design and construction methodology was

substantially modied and included a shift towards adopting more

manual construction techniques as well as cableway systems.

As for Sindila SHP, delays experienced due to the earlier construction

methodology, combined with the duration required to rethink and

adopt an alternative construction approach, substantially impacted

construction progress. By the end of 2018, a considerable amount

of construction works was still remaining, particularly along the

headrace waterway and at the weir, and commercial operation was

planned to commence in Q2 2019.

The Ndugutu and Sindila hydropower projects will initially connect

to an existing power evacuation line that will not be sucient to

evacuate the full capacity of both projects. The construction of the

new 100 km of 33 kV power evacuation line, which is the permanent

evacuation solution for both projects, is currently planned for

completion in Q3 2019 and will therefore need to be expedited to

avoid deemed energy claims.

Capacity

Planned

Generation

5.9

26.5

(in MW)

(in GWh/year)

Total

Investment

GET FiT

Commitment

17.1M

3.2M

(in USD)

Hydro

Ndugutu SHP

Under Construction

GET FiT Uganda | Annual Report 2018

his run-of-river hydropower plant is located in the Kasese

District in Western Uganda. The Project nally achieved

nancial close and issued the EPC Contractor with a Full

Notice to Proceed at the end of 2017.

The rst few hundred metres of headrace waterway from the weir

is located in particularly challenging terrain with unfavourable

geological conditions and there were substantial risks of

environmental damage during construction of the access road. A

staged process was therefore enforced whereby the Developer was

required to submit evidence of having constructed measures to

minimise the risk of environmental damage in order to achieve a

‘no-objection’ from GET FiT to proceed with excavation works.

By the end of 2018, construction of the weir access road had still

not been completed and designs of the upper headrace structures

were still to be nalised. A substantial amount of construction

works remained and several activities were critical to achieving

the planned commercial operation date including construction of

the weir and the upper headrace, installing the nearly 5.0 km long

steel penstock which only commenced during Q4 2018, as well as

construction of the powerhouse.

Given the continued delays with procurement of critical materials

and equipment and the generally poor progress observed during

2018, the Developer’s planned commercial operation date in

Q2 2019 appeared highly unlikely, with Q3-Q4 2019 being more

realistic.

Construction of the new 55 km 33 kV evacuation line, being

implemented by the Rural Electrication Agency, also remained a

critical risk to the Project with construction expected to commence

in Q1 2019. The risk of deemed energy will substantially increase

for both Nyamagasani projects in the case of further delays in

implementing the infrastructure.

Capacity

Planned

Generation

15.0

64.0

(in MW)

(in GWh/year)

Total

Investment

GET FiT

Commitment

36.1M

9.3M

(in USD)

Hydro

Nyamagasani 1 SHP

Uganda

Under Construction

GoU and KfW | Multiconsult

his run-of-river hydropower plant is located in the Kasese

District just downstream of the Nyamagasani 1 SHP in

Western Uganda. The Developer and EPC Contractor

are common to both the Nyamagasani 1 and 2 SHP’s

– the second cascade of schemes in the portfolio. Similar to the

Nyamagasani 1 SHP, progress observed during 2018 was generally

poor and the procurement of critical materials and equipment

had been delayed. A substantial amount of construction works

remained. COD was estimated to occur in Q2 2019.

The Project was also requested to partially stop construction of

the headrace canal during 2018 due to the potential for signicant

environmental and social damage as well as health and safety risks

with the originally proposed design and construction approach.

Designs through this steep and challenging section of terrain

were reviewed and important changes implemented, which also

lead to further delays. By the end of the year, design issues had

otherwise been largely resolved, with the exception of the sh pass

arrangement at the weir; construction of the weir, headrace canal,

and forebay was reasonably well advanced. Construction of the

powerhouse and installation of the penstock and electromechanical

equipment had not, however, commenced, and were critical to

achieving the planned commercial operation date. The new 33 kV

evacuation line is common to both Nyamagasani projects, and its

implementation is therefore also a critical risk to the Nyamagasani

2 hydropower project.

Capacity

Planned

Generation

5.0

25.5

(in MW)

(in GWh/year)

Total

Investment

GET FiT

Commitment

19.4M

3.7M

(in USD)

Hydro

Nyamagasani 2 SHP

Under Construction

Uganda

GET FiT Uganda | Annual Report 2018

his run-of-river hydropower plant is located in Isingiro

District in Southern Uganda on the border with Tanzania.

At appraisal stage, the Project had a planned installed

capacity of 16 MW and was expected to deliver 115 GWh of

output annually. At the end of 2018, the Developer advised that the

name plate on the plant would instead be 14 MW, but that updated

energy modelling indicated an expected two percent increase in

power output annually. Until potential implications of the design

change for the GET FiT Programme have been claried and the

design change materialises, the Project will continue to be reported

at 16 MW.

Having resolved the transboundary issues in executing a bilateral

agreement between the Governments of Uganda and Tanzania in

2017, the Project experienced a further major setback in Q1 2018. The

EPC Contractor, which had initially mobilised to site during Q4 2017

and commenced site establishment, was subsequently replaced

early during Q2 2018 for commercial and performance reasons. A

split EPC contract was adopted instead, with the replacement EPC

Civil Contractor being awarded a Limited Notice to Proceed during

Q2 and the original electromechanical subcontractor being awarded

a Notice to Proceed as the EPC Electromechanical Contractor, also

during Q2.

To minimise delays to the Project during replacement of the EPC

Contractor, the Developer continued with construction of the

camp facilities. The replacement EPC Civil Contractor subsequently

mobilised to site during Q3, undertook further ground investigation

works and design reviews, and largely completed mobilisation to

site. The powerhouse and intake were relocated further inland as

a result of the design review, and excavation of the powerhouse

foundations were well underway by the end of the year. Design

modications to the dam arrangement, spillway gates and sh pass

were also being considered.

Despite the delays, the revised commercial operation date for the

Project had been brought forward to early Q3 2019, approximately

two months earlier than the programme of the previous EPC

Contractor.

Capacity

Planned

Generation

16.0

115.0

(in MW)

(in GWh/year)

Total

Investment

GET FiT

Commitment

86.0M

12.3M

(in USD)

Hydro

Kikagati SHP

Under Construction

Uganda

GoU and KfW | Multiconsult

GET FiT Uganda | Annual Report 2018

ound management of environmental and

social (E&S) risks protects the environment

and safeguards project-aected people and

workers. Sound risk management also secures

a social licence to operate for a project developer, a

broad social acceptance within the project communities

and among other stakeholders. This acceptance guards

against a variety of social risks during construction and

operation and saves costs in the long run.

Projects supported by GET FiT are required to comply

with Ugandan regulations and international standards,

particularly the environmental and social performance

standards (PS) of the International Finance Corporation

(IFC). The IFC PS act as a global benchmark and are

widely applied by international nancing institutions

and private investors, also making these a convenient

common reference point in multi-donor funded

initiatives like GET FiT. Unfortunately, several

international lenders and owners did not ensure full

compliance with international E&S standards, thereby

increasing the supervision eorts by GET FiT. It is

important to note that the Ugandan regulations and

the IFC PS have many similarities, though there are

also some important dierences. For example, the

IFC PS require that compensation for loss of assets

during displacement is based on full replacement cost

(market value + transaction costs) rather than Uganda’s

requirement of using the lower depreciated value. The

IFC PS also require biodiversity osets when a project

impacts a protected area such as a national park. The

current Ugandan legislation does not require such

osets but proposals for inclusion of osets in new

Ugandan legislation have been made.

Environmental and Social

Performance

Environmental and Social Benchmark

3.1

GoU and KfW | Multiconsult

s highlighted in previous GET FiT Annual

Reports, the capacity of developers and their

consultants to manage environmental and

social risks, including health and safety, has

been considerably lower than expected. Weak capacity

was reected in the low E&S scores during appraisals

of applications for GET FiT support, also resulting in

numerous conditions precedent (CPs) dened by the

Investment Committee. An anonymous survey among

developers in 2015 conrmed that few of the developers

had pre-GET FiT experience from implementing projects

in line with the IFC Performance Standards.

The GET FiT Investment Committee dened more

than 50 environmental and social CPs across the three

RfPs in 2013, 2014 and 2015. The CPs were concerned

with revision of environmental and social impact

assessments (ESIAs), resettlement action plan (RAPs),

environmental and social management or action

plans (ESMPs or ESAPs) and livelihood restoration

plans (LRPs). Five (5) E&S CPs were cleared in 2018.

Cumulatively across the portfolio to date, 80 % of the

environmental and social CPs have been cleared.

As in previous years, GET FiT spent considerable time

reviewing and advising developers on E&S issues in

2018. Labour and working conditions including health

and safety on construction sites, managing additional

land acquisition during construction and ensuring

fair compensation, pollution and hazardous waste

management, and management of indirect impacts on

important biodiversity in national park areas have been

important issues in 2018. As more projects achieved

commercial operation there was need for additional

work on operation phase plans and management of

operation phase impacts such as reduced availability

of water along river sections where the hydropower

projects divert most of the water for much of the year.

In 2018, developers continued to express a demand

for GET FiT engagement on the management of

environmental and social risks. Additional resources

earlier provided by KfW and cooperation with ERA

continued to support this follow-up.

A total of 29 project visits to twelve (12) projects were

undertaken in 2018 including 24 project supervision

visits, four (4) COD visits, and one (1) post-COD visit. All

visits were to small hydropower projects. Action points

were identied in each visit, and the visits continued

to prove useful and a necessary part of managing

environmental and social risks. In addition, the

supervision team made multiple brief unannounced

visits at GET FiT projects in operation during the

rounds of scheduled visits. The GET FiT Implementation

Consultant normally undertakes a semi-annual one-day

supervision visit to each project under construction. In

2018, seven projects received additional visits due to the

multiple challenges faced by the projects that have not

yet achieved commissioning. For several projects, GET

FiT also shared information and coordinated feedback

to developers with lenders.

GET FiT Follow-Up and Support

3.2

GET FiT Uganda | Annual Report 2018

ost projects under construction in 2018

saw improvements in environmental and

social performance. Projects subject to

additional visits or being notied about

potential subsidy reductions responded more decisively

and rapidly to requests for improved environmental

and social performance and the need for closing long-

standing gaps. As a result of the Programme, there is

now a considerably higher degree of compliance with

Ugandan regulations and international standards

than would otherwise have been observed. Several

developers have made impressive improvements in

their capacity to manage environmental and social risks,

their internal management systems, and undertook

measures to safeguard people and nature during

project construction in 2018.

Most developers had, prior to GET FiT, not gone

through the full project cycle from project development

to operation following international E&S standards.

This meant new challenges kept arising as the projects

moved into the next stage of the project cycle including

commissioning and operation, which necessitated

further GET FiT follow-up. Damage to the surrounding

natural vegetation and rivers as well as to local people’s

properties due to poor construction practices (e.g.

excavation), delays in compensation payments triggered

by construction damage, and workers’ health and safety

risks, remained challenges in 2018 and will require

further follow-up in 2019 to close outstanding issues

prior to commissioning. Substantial compensation to

local people for damage has been triggered. Damage

also led to legal proceedings against developers

and contractors, some of which were settled during

2018. Developers’ monitoring of E&S issues during

construction remained a weakness in most projects,

and resource-constrained Ugandan government

lead agencies were not able to completely full their

intended roles in monitoring compliance. Participation

in GET FiT supervision visits contributed to ERA’s follow-

up of projects and eorts to ensure construction in

compliance with key Ugandan regulations.

Emerging challenges included the transition from the

construction phase team to the operation phase team,

ensuring adequate hand-over and institutionalising

local knowledge and understanding of sensitive

issues. Several projects retained an environmental

and social ocer from the construction phase, and

this person plays an important role in community

liaison as operation phase issues arise, for instance

grievances related to reduced river ow between the

intake and power station. Releasing and monitoring

the environmental (minimum) ow came up as a

challenge for projects in operation, and there were

indications that some projects did not release water in

accordance with the requirements set by the Ugandan

Government. GET FiT works with ERA to address these

non-compliances and develop guidance for future

follow-up of environmental ow releases.

GET FiT sees environmental and social sustainability as

key to overall project sustainability. Where a forceful

response to persistent non-compliance is required,

GET FiT has several tools available, including increasing

the frequency of supervision visits at the cost of the

developer, unannounced site visits, construction stops,

subsidy reduction, and even revoking the subsidy in

extreme cases.

One approved project had its support revoked by

the GET FiT Steering Committee in 2015 due to

consistent serious environmental and social non-

compliances. In 2016, two projects were requested to

suspend construction until corrective measures were

implemented, one project was requested to do the

same in 2017, and ve projects had stops in specic

construction works in 2018 but not across the entire

project site. All projects resumed construction following

substantial improvements. While only one project was

subject to quarterly supervision visits in 2016, ve

projects were covered by quarterly visits in 2017, and

seven projects in 2018. Additional visits were triggered

due to E&S non-compliances and partly also due to

limited construction progress and limited on-site project

management capacity. Two projects experienced

subsidy reductions due to serious non-compliances that

were not adequately addressed during the cure period.

Some projects still had substantial non-compliances at

the end of 2018 and may face actions by GET FiT in 2019

unless urgent corrective measures are implemented.

Improvements and Remaining Challenges

3.3

GoU and KfW | Multiconsult

Deemed Energy (percent) Planned Energy (GWh) Actual Energy (GWh) Deemed Energy (GWh)

GET FiT Uganda | Annual Report 2018

our projects achieved connection and

synchronisation to the Ugandan national grid

in 2018, bringing the total of operational GET

FiT projects up to ten (10). Unfortunately, some

of these projects continue to experience challenges of

inadequate and unreliable power evacuation due to

technical issues on the grid, which has already led to

substantial deemed energy claims from these projects

to GoU. Remaining issues need to be rectied in order

to reduce such claims and increase power supply.

Figure 13 shows the planned, actual and deemed

energy outputs of the GET FiT portfolio projects in 2018

(left axis). It also shows the percentage of deemed

energy relative to total potential generation (right axis).

As seen in the gure, four projects experience deemed

energy levels at more than 10 percent of potential

generation, with two projects Nkusi and Siti 1, at more

than 25 percent.

Grid Connection Status and

Challenges

Operational Projects

4.1

Figure 13 - Planned, Annual and Deemed Energy Generation from GET FiT Projects in 2018.

As seen in Figure 13, there is a wide variation in the reli-

ability of power evacuation among commissioned pro-

jects. Concerted eorts are needed to strengthen the

national grid in order to maximise the benets of GET

FiT distributed generation. The evacuation challenges

and interventions experienced by selected projects

commissioned in 2018 are highlighted below.

*Nkusi, Nyamwamba and Lubilia commissioned during the year and their planned generation is shown for operational months only. Waki commissioned in late 2018 and

is not included.

GoU and KfW | Multiconsult

Nkusi SHP experienced the biggest challenges of

evacuation during 2018. Following the project’s

commissioning in June 2018, the project was initially

only able to evacuate 45 % of its capacity. This was

mainly due to constraints in the existing grid’s protection

scheme and an inadequate network conguration that

was suited to power distribution rather than power

evacuation.

Additional interventions by various GoU agencies and

the developer have since enabled the full evacuation of

the project. The full evacuation was facilitated by joint

eorts from the developer, UEDCL and Umeme, with

oversight from ERA. The key interventions included the

reconnection of a 1.5 km line stretch along the Kyenjojo

– Kagadi 33 kV line that had been disconnected due to

unresolved wayleave issues. The developer covered the

wayleaves compensation and the line was reinstated

by UEDCL. The rest of the interventions involved

the reconguration of the grid’s protection scheme

for power evacuation through installation of new

protection devices and replacement of broken or weak

poles, among others.

Unlike many other projects, the evacuation line for

Waki was built and in place long before the project

was commissioned. However, the project experienced

several bottlenecks in achieving full evacuation during

grid synchronization tests. The challenges were mainly

related to the existing line’s fault protection and general

maintenance. As a result, the line was initially only able

to evacuate 20% of its capacity before tripping during

tests in November 2018.

The network operator, UEDCL, implemented several

interventions that included general line maintenance

However, a new challenge arose when the distribution

network operator in the project area, UEDCL, reported

a signicant increase in energy losses resulting from

the evacuation of Nkusi. The losses were aggravated

by the very long 33 kV lines through which the project

is evacuated to the nearest UETCL substation in Fort

Portal. Additionally, there is limited electrical load in the

project area, hence the need to wheel energy through

the long medium voltage lines. The high losses resulted

in a temporary cap on the project’s energy generation

by UEDCL. The developer is implementing measures

to reduce technical losses, including the construction

of new distribution lines to create alternative routes of

evacuation for increased loading and network reliability.

The Government is also planning to implement

measures to optimise the evacuation of Nkusi and

other pipeline projects in mid-western Uganda. The

key intervention involves expediting the construction

of the Muzizi B high voltage substation close to the

project area to enable the projects to be evacuated

through the recently commissioned Nkenda – Fort

Portal – Hoima UETCL high voltage transmission line.

Designs for the planned 40 MVA substation are ongoing

with coordination between UETCL, REA and the Sector

Planning and Coordination Committee (SPCC).

(vegetation clearance, pole replacements) and

reconguration of the protection scheme, i.e.

installation of jumpers, drop out fuses and auto

reclosers at strategic locations along the evacuation line.

The timely interventions by UEDCL and GoU enabled

the project to achieve close to 80% evacuation by the

time it achieved COD on 3rd December 2018. However,

numerous grid failures persist and options are being

explored to stabilize the network. The ultimate solution

is considered to be the construction of a double circuit

33kV line through Biiso-Kigorobya to the new UETCL

132/33kV transmission substation at Bulemwa near

Hoima. The developer has commissioned a study on

this implementation.

Waki SHP

Nkusi SHP

No.

Project

Kyambura 7.6 Q2-Q3 2019

On track. Line to be built by developer.

Line completed by REA. Energization was

delayed due to RAP issues.

Delayed. Line to be expedited by REA. May

also face deep interconnection issues at

Nkenda substation.

Delayed. Line to be expedited by REA.

Severely delayed. Line to be expedited

by Umeme.

Completed. Line built by REA.

5.3 Q1 2019

16.0 Q3-Q4 2019

5.9

Q2 2019

16.0 Q2 2020

16.5 Q2 2019

5.0 Q2-Q3 2019

Sindila

Nyamagasani 1

Ndugutu

Kikagati

Siti 2

Nyamagasani 2

Capacity

(MW)

Expected

COD

Deemed Energy

Risk

high

Status*

Delayed. Line to be expedited by REA. May

also face deep interconnection issues at

Nkenda substation.

high

GET FiT Uganda | Annual Report 2018

For the seven projects that are still under construction, major grid reinforcements are still required and behind

schedule. The current status and deemed energy risk levels associated with these projects are summarised in

Table 2 with further elaboration below for selected projects.

Projects Under Construction

4.2

Table 2 - Status of Interconnection of GET FiT Projects Still Under Construction

*Status as of 18.03.2019

The 16.5 MW Siti 2 SHP in Bukwo district, Eastern

Uganda is expected to commission in Q2 2019. The

timely evacuation of the project is highly uncertain. The

required grid reinforcements involve the construction

of approximately 175 km of 33 kV evacuation lines to

Umeme’s Mbale substation, as well as upgrades to

the substation. ERA gave authorisation to Umeme

to construct the line in January 2018. As of January

2019, Umeme was in the process of procuring

multiple contractors to expedite the construction.

The procurement of EPC contractors is expected to

be concluded at the end of Q1 2019, with a planned

construction period of four months thereafter. There

is thus a high risk of deemed commissioning for Siti

2. KfW and the GET FiT Secretariat continue to engage

with all stakeholders towards expediting the line’s

implementation.

Siti 2 SHP

low

medium

GoU and KfW | Multiconsult

The 5.3 MW Sindila SHP in Bundibugyo was declared

ready for synchronisation to the national grid in February

2019. There were initial delays to the construction of

the 4.8 km 33 kV line from the project’s switchyard to

the existing grid at Bubandi for evacuation towards Fort

Portal. This line will also evacuate the 5.9 MW Ndugutu

SHP after wider grid reinforcements are implemented.

Following concerted eorts by GoU through MEMD,

REA, ERA and UETCL, with support from GET FiT, the line

was built and ready by February 2019. As Sindila starts

grid synchronisation tests, it is expected that additional

recongurations to line protection and maintenance

may be required to minimise outages and ensure full

Construction of a joint 55 km 33 kV line to evacuate power

from both Nyamagasani 1 SHP and Nyamagasani 2

SHP is being implemented by REA which has procured

an EPC contractor. Construction of the line is expected

to commence in Q1 2019 and be completed in Q3 2019.

evacuation. Grid synchronisation tests for Sindila had

not been done as of mid-February 2019.

The 5.9MW Ndugutu SHP is expected to achieve COD in

Q2 2019. The timely construction by REA of the new 104

km 33 kV line from Bubandi to Fort Portal with funding

from the UK Department for International Development

(DFID) through GET FiT will be critical for the evacuation

of both Ndugutu and Sindila SHPs. The line construction

is expected to be completed in Q3 2019. Therefore,

a high risk of deemed commissioning remains for

Ndugutu SHP. The GET FiT Secretariat will continue to

actively engage with GoU, the Supervision Consultant

and Contractors to ensure that the implementation of

the line is expedited.

With Nyamagasani 2 (5 MW) currently expected to be

commissioned in Q2, there is a high risk of deemed

commissioning. The implementation of the evacuation

lines for Nyamagasani 1 and 2 is part of the wider

interventions through GET FiT, and the Secretariat will

continue engagement to expedite the reinforcements.

Sindila and Ndugutu SHPs

Nyamagasani 1 and 2 SHPs

Uganda

Mbale - Bulambuli

132kV

33kV grid

Reinforcement

Nkenda Substation

Reinforcement

Grid Investment

Hydropower Bagasse Solar PV

Waki HPP

Soroti

Siti II HPP

Siti I HPP

Tororo

Kakira

Nkusi HPP

Sindila HPP

Ndugutu HPP

Rwimi HPP

Lubilia HPP

Kyambura HPP

Nyamwamba HPP

Nyamagasani I HPP

Muvumbe HPP

Kikigati HPP

Nyamagasani II HPP

Opuyo Substation

Reinforcement

GET FiT Uganda | Annual Report 2018

A number of projects still present a high risk of deemed energy obligations to GoU if critical grid reinforcements

are not implemented in time for the planned project commissioning. Multiple interventions are ongoing, which

are presented in the following two sections. An overview of key ongoing grid investments that are funded by GET

FiT, or relevant to the GET FiT portfolio, is provided in Figure 14.

Grid Reinforcements

4.3

Figure 14 - GET FiT Uganda Project Map with Grid Investment in Green Boxes

Item

Total grid interconnection support

Required Intervention

Reinforcement of 33 kV networks in Western Uganda UEDCL 13.7

ERA 3.9

3.6

21.2

TA support to ERA

Opuyo Substation upgrade

Estimated cost

(MUSD)

Project owner

UETCL

GoU and KfW | Multiconsult

GET FiT Interventions

4.3.1

Three grid-related interventions are funded through the GET FiT Programme, namely a reinforcement of 33kV

networks in Western Uganda, an upgrade of the Opuyo substation, and Technical Assistance to ERA. An overview

of the elements and associated costs is provided below. The elements are further detailed in the following sections.

The Programme secured support from DFID to

construct new 33 kV distribution lines in the West of

the country for the power evacuation of four projects.

The implementing agency is REA which has procured

two EPC contractors to construct the lines in two lots,

namely; Lot A involving the construction of 104 km

of new 33 kV lines for the evacuation of Sindila and

Ndugutu SHPs in Bundibugyo, and Lot B involving 120

km of new 33 kV lines for evacuation of Lubilia (5.4 MW),

Nyamagasani 1 and 2 in Kasese district. The initiative

will ensure evacuation of approximately 37 MW of new

generation to the national grid.

The Works include the design, supply, construction,

testing and completion of the two Lots and are expected

to be completed in August 2019, as per the original EPC

contracts. The contractors for both Lots have completed

topographical surveys of the line routes, submitted

line designs subject to approval by the Supervision

Consultant, and initiated equipment procurements and

started construction as of Q1 2019.

A critical aspect for the implementation of both lines

will be the timely compensation by REA of Project

Aected Persons (PAPs) in both Lots prior to the start of

construction. REA completed the Resettlement Action

Plan (RAP) studies in 2018 and has secured funds for

compensation from GoU. However, detailed designs by

the EPC contractors resulted in changes in the original

line routes, requiring additional RAP studies. It will be

important to manage any social issues and coordinate

the compensation process eectively to avoid extended

delays.

Reinforcements of 33 kV networks in

Westerns Uganda

Table 3 - Funding Commitments for Interconnection Support through GET FiT

GET FiT Uganda | Annual Report 2018

The objective of this interconnection component is to

install 2x40 MVA 132/33 kV transformers at the Opuyo

substation which will facilitate adequate capacity and

improved reliability and security for the evacuation of

existing and planned solar generation power plants

near the Opuyo area. The Soroti solar PV plant is

evacuated through Opuyo substation. The current

transformer capacity is a single 10/14 MVA 132/33 kV

transformer which presents a reliability risk in case of

outage.

Regarding implementation, the contracts for the

Supervision Consultant and EPC contractor became

eective in May 2018. The implementation schedule

according to the contracts is 16 months; hence

contractual completion is expected in September 2019.

The contractor has nalised the substation electrical

and civil works designs and started mobilisation for the

actual construction in Q4 2018.

In addition to infrastructure reinforcements, the grid

connection support component included a budget for

technical assistance to ERA through the GET FiT TA

Facility. Although funded as part of the grid support

initiative, these TA components were not restricted

to grid related issues, but also introduce wider

strengthening of ERAs regulatory systems. As outlined

below, one component was nalised in 2018, with one

still remaining for completion in 2019. Notably, several

other TA components have been conducted under the

GET FiT TA Facility in earlier years. Please refer to earlier

GET FiT reports (www.gett-reports.com) for more

details.

Optimisation of Compliance Monitoring of Distribution

and Transmission Licensees.

The main objective of this TA was to equip ERA sta with

the procedural, technical, economic and environmental

competence to perform its mandate as regulator of

the transmission and distribution sub-sector in line

with international best practice. The expected outcome

was the establishment of licensing and performance

monitoring processes for all present and future

transmission and distribution licensees. The assignment

was implemented by Azorom and completed in 2018.

Regulatory Information Management System (RIMS)

ERA has committed to invest in the use of information

technology to improve eciency in the execution of its

various mandates. The main objective of this assignment

was to support ERA in the successful implementation of

a Regulatory Information Management System (RIMS) to

enhance its information collection and data processing,

automate regulatory analysis and compliance

monitoring, as well as automate interactions with its

stakeholders. The contract for the system design and

preparation of tender documents was awarded and the

project was started in May 2018. The entire assignment

duration is estimated to be 13 months. The Consultant

is currently nalising the design and solution report

and the procurement of the contractor to implement

the system has been initiated by ERA.

Opuyo Substation Upgrade

Technical Assistance to ERA

GoU and KfW | Multiconsult

Wider Sector Interventions

4.3.2

Two sector-wide interventions for grid reinforcements will directly impact the evacuation of power generated by

GET FiT projects, namely the upgrade of the Nkenda substation and the implementation of the Mbale-Bulambuli

132 kV transmission line.

Three GET FiT projects currently under construction

(Nyamagasani I & II and Kyambura) with a combined

capacity of 28.6 MW will be evacuated through UETCL’s

Nkenda substation after their commissioning in

2019. The current transformer capacity of Nkenda

substation is 40 MVA. According to UETCL data, the

average maximum loading of the two transformers at

Nkenda in September 2018 was 99 %. It is clear that

the substation’s capacity will be highly inadequate to

evacuate the three new projects in addition to other

pipeline projects planned in the Kasese area during

2019. This presents a high risk of deemed energy

obligations for the Government.

The Government through UETCL is currently urgently

considering interim measures to upgrade the power

handling capacity of Nkenda substation. The options

include the movement of redundant high voltage

transformers from other parts of the network to

Nkenda, or the deployment of mobile transformers, if

available.

The planned 79 km Mbale-Bulambuli transmission line

is expected to evacuate Siti 1 and 2 SHPs, eliminate

transmission bottlenecks in Eastern Uganda and

enhance system reliability, availability, and quality of

power supply. The scope includes the construction

of Bulambuli (Atari)—Mbale 132kV transmission line,

132/33kV substations at Bulambuli (Atari) and Mbale,

and rural electrication along the 132kV line. The

feasibility study including ESIA scoping of the line has

been completed, with funding from the EU ITF through

KfW. Financing for the line’s construction has been

proposed by the German government and nancial

close is expected in 2019. The line is not expected to

be completed before 2021, hence a new 33 kV line is

needed to evacuate Siti 2 in the interim until then.

Nkenda Substation Mbale - Bulambuli Transmission Line

Sub-Saharan

Arca

43%

Uganda

27%

GET FiT Uganda | Annual Report 2018

or most countries in Sub-Saharan Africa (SSA)

unreliable and insucient power-supply poses a

substantial challenge to poverty alleviation and

economic development. In the region almost half

of the population does not have access to electricity

and continuous power outages hamper the economic

performance of those already connected to the grid.

Enabling improved quality and security of grid electricity

supply in Uganda requires signicant investments in

renewable power generation. Uganda and other East

African countries are currently experiencing a reduced

ability to obtain concessional nance due to overall

high levels of public debt. Hence, the funding gap in the

electricity supply industry, including power generation,

cannot be lled by the public sector alone but requires

increasing participation of the private sector (e.g.,

through independent power producers). However,

private investments in electricity generation will not

materialise without a suitable investment environment.

For instance, Ugandan rms reported in the last World

Bank Enterprise Survey (2013) that they lose on average

11.2% p.a. of sales due to outages and identied these

to be their main obstacle in their business environment

(see Figure 15). At the same time, only 22% of Ugandans

have access to on-grid electricity at all and until recently

there was a shortage of electricity generation.

Such an environment is characterised by a clear,

credible and tested regulatory framework for private

sector participation, including standardised Power

Purchase Agreements (PPA) that mitigate o-taker

risks. It also requires high level political backing through

suciently credible and transparent long-term policy

and investment plans for power sector development.

Political commitment towards cost-reective electricity

taris is also required. In the early stages of private

sector participation, where the regulatory framework

has not yet been suciently tested, a case can be

made for nancial incentives to mobilise the rst

Academic Corner

Figure 15 - Population Access to Electricity (including o-grid) and Firms’ Main Obstacle in Uganda 2013

GoU and KfW | Multiconsult

private investment and kick-start participation in a new

segment. In order to get developers and sponsors o

the fence, GET FiT Uganda introduced a top-up tari to

provide keen developers with a more attractive return

on renewable IPP investments.

Hence, the question is to what extent the GET FiT

Programme incentivised private investments that

would not have happened otherwise. Given that

Randomised Controlled Trials (RCTs) are normally not

possible for infrastructure projects, such as GET FiT, we

use a threshold approach to evaluate the additionality

of the GET FiT Programme.

We also model the protability of projects, namely the

Internal Rate of Return (IRR). Firms that applied to build

GET FiT plants needed to provide extensive nancial

documentation, which was checked by the Programme

Management. The quality of this documentation is

above that of most other comparable programmes. In

addition, instead of using the same metric of nancial

viability across dierent rounds (e.g. 11% IRR), we use the

lowest IRR in each round of projects that were rejected,

but then went ahead with construction despite not

receiving funding by the GET FiT Programme. This IRR is

referred to as the counterfactual IRR, and provides an

indicative level for the actual (non-subsidised) market

IRR. Out of the 17 projects, 14 were small hydropower

plants, so we focus only on this subset of plants.

Our preliminary ndings, as illustrated in Figure 16,

suggest that most small hydropower plant projects

were additional i.e., would not have been built without

the GET FiT project support, particularly in funding

rounds 1 and 2. It is evident from the data, that the

protability of projects required to go ahead with

construction (counterfactual IRR) declined substantially

in round 3, indicating lower investment risks. This

suggests that the cost of capital – particularly equity –

went down over time and across the dierent rounds.

The GET FiT Programme rightfully decreased the top-up

over the rounds to account for lower investment risks

in Uganda. Nonetheless, our research indicates, that in

retrospect, the phase out could have been faster.

While these ndings may provide a basis for further

discussion on determination and adjustment of top-

up levels in future GET FiT schemes, it should be

noted that the counterfactual IRR only provides an

indicative level of market IRR – dierent hydropower

projects and dierent investors have dierent return

requirements. Moreover, additionality is dicult to

determine due to signicant uncertainty with respect to

actual construction costs and the exact level of returns

required by individual investors.

The GET FiT Programme in Uganda demonstrates that

substantial declines in power cost are possible even

Figure 16 - The required protability of the projects dropped across the three rounds, due to lower investment risk

GET FiT Uganda | Annual Report 2018

for mature technologies, such as small hydropower

technologies, through lowering the cost of capital

and risk perception of investors. For that a sound

regulatory environment is critical, which includes a clear

procedure for obtaining generation and environmental

permits, interconnection and a solvent o-taker.

This is particularly important for renewable energy

technologies, where generally a greater proportion

of the cost needs to be paid up front compared to

conventional technologies, such as gas plants. Hence,

nancing cost – cost of debt and equity – and risk

perception are central cost drivers of these projects

and maintaining a predictable investment environment

is key to minimising project costs and ultimately

electricity taris.

This section provided an overview of the ongoing

research of KfW, German Development Bank, and

the Centre of the Environment, Energy and Natural

Resource Governance (C-EENRG) of the University of

Cambridge on the impacts of the GET FiT Programme.

With our research, we hope to contribute to the

academic literature and policymaking in two ways. First,

many developing countries face the dual challenge of

greening their energy mix – to emit less greenhouse

gases and other pollutants – while achieving economic

development to alleviate poverty and improve living

standards. Hence, understanding how to best support

developing countries, such as Uganda, in meeting

these challenges is crucial for international climate

and development policy. Second, we also intend to

contribute to the debate on how to evaluate policies

when true randomisation is not possible or the

sample size is too small to perform more sophisticated

statistical analysis.

In additional ongoing research, we attempt to

understand whether the GET FiT plants, which are

distributed geographically throughout Uganda, have

led to lower power outages, using satellite data to

capture variations in night lighting to proxy changes in

outages related to the GET FiT plants.

The study on GET FiT is a joint work between Benedict

Probst, Prof. Laura Diaz Anadon, Prof. Andreas

Kontoleon at the University of Cambridge and Lotte

Westermann (KfW). The study is envisaged to be

published in the World Development special issue

‘Latecomer Development in a Greening World’.

About the Study

GoU and KfW | Multiconsult

GET FiT Uganda | Annual Report 2018

n the rst half of 2018, a comprehensive eort was

made across the GET FiT team to map out, elaborate

and present key lessons learned from seven main

areas of Programme implementation. This resulted

in seven brieng notes (brochures) that were published

through the GET FiT website and other channels such

as the World Bank PPP Knowledge Lab. The brochures

were prepared by Multiconsult, with key input from

KfW and Development Partners.

In the following sections, additional Lessons Learned

that have emerged in 2018 will be presented, addressing

the learning points regarding the coordination with

developers to reduce construction delays, dealing with

minimum environmental ows of hydropower projects,

the benets of post-commissioning follow-ups, and the

importance of a exible TA design.

Lessons Learned

GoU and KfW | Multiconsult

Reducing Construction Delays and

Coordinating with Developers

6.1

Inuencing developers and contractors to implement projects within the Programme’s time-bound constraints has

required contractual incentives, as well as increased and focussed Programme support to help guide them toward the

nishing line.

he performance of developers and contractors

during the GET FiT implementation phase has

varied substantially, and signicant delays have

been experienced across a number of projects.

Poor performance and delays have to a large extent

been a result of deciencies within developer’s and/or

contractor’s organisations, weak EPC contracts between

developers and contractors, inexperienced contractors,

and limited on site control and management.

Design teams common to multiple GET FiT projects

have been stretched beyond capacity at various stages,

resulting in delays in achieving design scheme freeze

earlier during projects as well as the timely resolution

of design issues and unforeseen conditions on site as

they arise during construction. Ongoing design changes

during construction have also resulted in substantial

additional land acquisition and costs for some projects.

During 2017, GET FiT introduced several Programme

management tools, which included increasing the

frequency of supervision visits at the cost of the

developer, unannounced site visits, temporary

construction stops, as well as nancial penalties, which

were applied as an equivalent reduction in the allocated

subsidy. During 2018, these tools were applied with

increasing frequency to incentivise projects to complete

in a timely and responsible manner. Temporary stops in

construction and subsidy reductions were also applied

to several projects in order to correct deciencies,

such as irresponsible construction practices in an

environmental and social context (see Section 3 for

further details), and to incentivise improvements in

performance. Moving into 2019, additional quarterly

visits will now be imposed on all but one of the remaining

projects still to achieve commercial operation.

Increased supervision visits and Programme support

during 2018 predominantly focussed on assisting

developers and contractors to resolve design issues

in an acceptable and timely manner and improving

construction planning with the aim of minimising risks

of further delays. Discussions have focussed on the

sequencing and duration of works, understanding and

managing risks such as periods of statistically higher

river ows, changes in construction methodologies

to achieve eciencies and manage environmental

and social risks, identifying potential weaknesses

and bottlenecks in resources and supply chains, and

allocating resources to meet construction schedules.

We refer to ‘minimum ow’ rather than the often-used concept of ‘environmental ow’ as the minimum ow requirements dened in Uganda (by the Directorate of Water

Resources Management) usually do not have the characteristics of a true environmental ow, namely a description of the quantity, timing and quality of water ows required

to sustain freshwater ecosystems and human livelihoods that depend on these ecosystems

GET FiT Uganda | Annual Report 2018

Determination of environmental ows, the release of these ows and the monitoring and reporting to Ugandan lead

agencies remain an unresolved issue where additional eorts are required by the GoU and project developers. GET FiT

has identied key gaps and opportunities to close these.

he release of a minimum ow

is a standard

mitigation measure for hydropower projects

to reduce impacts on people and ecosystems

along the aected river section between the

intake and the point where water is returned to the

river, a river section often several kilometres long.

The volume of the minimum ow also directly impacts

on the economic viability of a hydropower project

(see GET FiT Annual Report 2017, pp. 49-50, for more

information). Lessons on this important topic continued

to be generated under GET FiT in 2018.

During the initial stages of GET FiT, the lack of clear

expectations from Ugandan lead agencies on the

requirements and frameworks expected to be followed

when deriving minimum ows proved challenging to

most project developers. Guidance on determining

minimum ows is important to ensure predictability

and transparency in the determination of minimum

ow requirements. Therefore, programmes such as

GET FiT may benet substantially from modest early

investments in improving clarity on environmental

ow expectations together with relevant in-country

authorities.

During detailed design and construction, a variety of

solutions to release and monitor the minimum ows

were proposed by project developers. Most of the

proposed solutions were deemed not t for purpose by

GET FiT and multiple iterations were typically required

to arrive at viable designs. Future programmes will

likely benet from clarifying minimum requirements for

environmental ow release arrangements at an early

stage and in collaboration with relevant lead agencies.

With an increasing number of GET FiT supported projects

entering the operation phase, further lessons were

identied in 2018. Release of minimum ow volumes

below the requirements set by Ugandan authorities

and GET FiT were uncovered along with missing or

incorrect reporting to the relevant agencies. This

underlines the importance of identifying appropriate

monitoring mechanisms for the minimum ow

releases and ensuring data is captured and available

for independent verication. Future programmes like

GET FiT could develop minimum requirements for

monitoring and reporting in cooperation with relevant

agencies, including the o taker of electricity generated,

that may have requirements for calculating deemed

energy which may aect the minimum ow monitoring

arrangements.

Dealing with Minimum Flows

6.2

GoU and KfW | Multiconsult

Follow-up during the operations and maintenance phase is essential for checking compliance with technical and

environmental and social obligations and for providing valuable information with respect to the quality of the plant,

installed equipment, and eectiveness of the planned preventative maintenance regime.

he Programme’s follow-up should not end with

the commissioning of a project. Continued

follow up is important for ensuring continued

compliance with technical requirements and

environmental and social regulations and standards,

including the resolution of key issues highlighted in the

COD Report. During several post-COD follow-up visits

in Uganda, issues previously identied as requiring

attention have not always been addressed, and

developers’ attentions have been seemingly quickly

diverted to other issues as soon as the initial COD

subsidy payment has been received. Post-COD follow-

up is therefore essential for checking compliance,

such as checking the correct operation and recording

of minimum ow arrangements, which has been a

repeated non-compliance on several GET FiT projects

post-COD.

Developers are also generally required to follow a

programme of planned preventative maintenance, to

prolong the serviceable life of key components and

the Project, and to keep records of maintenance works

and report on the cause of each outage, whether for

internal or external reasons, and planned or unplanned.

Developers are required to provide a summary of these

records as well as generation and line outage records

at the time of applying for an annual subsidy payment,

which allows for an assessment of the quality of plant

and installed equipment, as well as the eectiveness of

the planned preventative maintenance regime.

Operations and Maintenance

6.3

GET FiT Uganda | Annual Report 2018

Post-COD Follow-up for Sustainable

Projects and Sector Development

6.4

Monitoring visits after commissioning can ensure continued technical, environmental and social compliance and can

close remaining knowledge gaps to improve project sustainability and sector performance.

ontinued follow up through supervision and

monitoring visits is not only important to

ensure continued technical, environmental

and social compliance but can also be a tool to

continue closing knowledge gaps. This will, ultimately,

enable more sustainable projects for the country and

can contribute to learning for improved performance of

the energy sector as well as agencies with responsibility

for the environment, water resources management

and social development.

GET FiT Uganda is committed to continued monitoring

visits after project commissioning and undertook one

scheduled post-COD visit to a commissioned project in

2018 and several unannounced visits. Several post-COD

visits are planned for 2019 as more projects will have

been in operation for more than a year. These visits

are important to follow-up on remaining issues at COD

and have already given useful new insights relevant

to ERA and other agencies in Uganda; for instance

on challenges in handling sediments and minimising

related damage to turbine runners as well as non-

compliances in releasing and monitoring environmental

(minimum) ows in hydropower projects (as addressed

in the previous section). Having worked closely with,

and benetted greatly from, ERA throughout the GET

FiT Programme, joint post-COD visits also provide a

good basis for the nal handover of the Programme to

ERA.

Originally, post-COD supervision was not part of the

Programme scope and budget. However, once the need

was established some funding was made available for

this purpose. An important lesson for similar projects

in the future should be to incorporate post-COD

supervision and follow-up in the Programme design at

an early stage, particularly in order to secure funds and

other resources needed.

GoU and KfW | Multiconsult

Flexibility of Technical

Assistance Design and Use of Funds

6.5

In a long-term programme, provision of Technical Assistance (TA) should not be entirely pre-dened but have sucient

exibility to adapt to real and emerging needs identied during implementation.

he provision of TA must be able to adapt

to new intelligence and emerging needs,

which requires donors to structure such

programmes in a exible way and provide

funding accordingly. With its exible design, GET FiT

has provided on-demand TA based on observed gaps

as well as needs identied by ERA. This was possible

due to 1) a exible frame budget for TA provided by the

Development Partners, 2) a close working relationship

between ERA, KfW and the Consultant throughout

Programme implementation and 3) a willingness and

ability to re-allocate available funds to other critical

areas of TA.

Potential TA activities were added to a shortlist by ERA

in cooperation with GET FiT and was considered a living

document. Specic TA needs were outlined as they

emerged, and gradually expanded and detailed. This

process enabled ERA to address capacity gaps as they

emerged. Since the scope and objective of activities are

already outlined, a timely implementation of these is

possible, aided by the exible TA budget provided by

Development Partners. While the provision of Technical

Assistance is not the primary objective of GET FiT, the

exibility and timely implementation of such tailored

assistance has a positive impact on the implementation

of the GET FiT portfolio and increases the sustainability

of the GET FiT Programme on the Ugandan power

sector.

The GET FiT Lessons Learned Brieng Notes

More insights for the design and implementation of Public-Private Partnership (PPP) infrastructure

programmes can be found in the GET FiT Uganda Lessons Learned Brieng Notes, which serve

as an input for the GET FiT concept and rolling out similar programmes in other countries. Seven

brieng notes were prepared and published on the GET FiT website, as well as on World Banks’s PPP

knowledge lab. The following topics are covered:

• Leveraging Commercial Investments • Complying with E&S Performance Standards

• The Building Blocks of a Successful PPP Programme • Making the Impact Stick

• Programme Implementation • Monitoring for Results

• Developers Engagement

GET FiT Uganda | Annual Report 2018

GET FiT Visibility

7.1

Other Activities

The 5.4 MW Lubilia SHP was ocially commissioned on June 28, 2018. The project was developed by DI Frontier

Market Energy & Carbon Fund, a Danish private equity fund with a portfolio of renewable energy projects in

Eastern Africa. The Netherlands Development Finance Company (FMO) was the lead arranger of the USD 10.2 M

senior loan facility, 50 % of which was syndicated to the Emerging Africa Infrastructure Fund (EAIF).

The commissioning ceremony was presided over by the Minister of State for Mineral Development, Hon. Peter

Lokeris, and attended by the German Ambassador, Dr. Albrecht Conze, the Norwegian Ambassador, Susan Eckey,

as well as high level representatives of other key stakeholders including ERA and KfW.

Commissioning Ceremony of the Lubilia Hydropower Project

Figure 17 – Attendees at the Commissioning Ceremony inside the Facilities of Lubilia.

GoU and KfW | Multiconsult

Figure 18 - Hon. Peter Lokeris (2nd left), Edward Iruura (ERA), Dr. Albrecht Conze, Susan Eckey and Daniel Schultz (DI

Frontier) Touring the Commissioned Lubilia SHP

GET FiT Uganda | Annual Report 2018

The 9.6 MW Nkusi project was ocially commissioned on 11th October 2018. The project was developed by PA

Technical Services and nanced by the Trade and Development Bank. The Chief Guest was the Minister of State

for Minerals, Hon. Peter Lokeris, who represented the Government of Uganda. The ceremony was also graced by

the presence of Members of Parliament from the Natural Resources Committee, representatives from MEMD and

the Board and Management of ERA. The GET FiT development partners were represented by the Ambassador of

Norway, Ms. Susan Eckey and the Deputy Ambassador of Germany, Ms. Petra Sabine Kochendörfer and KfW.

Commissioning Ceremony of the Nkusi Hydropower Project

Figure 19 - Nkusi Commissioning Ceremony. L-R: Petra S. Korchendörfer (Dep. German Ambassador), Susan Eckey

(Norwegian Ambassador), Hon. Peter Lokeris, Zaneta Freyer (PATS), Eng. Ziria Tibalwa (CEO, ERA) and PATS Representatives

Figure 20 - Dignitaries from the Uganda Parliament, MEMD, GET FiT Development Partners and ERA at the Nkusi SHP Pow-

erhouse During the Project’s Commissioning Ceremony

GoU and KfW | Multiconsult

The 9.2 MW Nyamwamba SHP held its inauguration ceremony on 14th August 2018. The project was developed

by South Asia Energy Management Systems (SAEMS) LLC and nanced by FMO. The Chief Guest was the Vice

President of the Republic of Uganda, HE. Edward Sekandi. The ceremony was also attended by the Minister of

Energy and Mineral Development, Hon. Irene Muloni, the Minister of State for Energy, Eng. Simon D’Ujanga, the

Permanent Secretary MEMD, Robert Kasande and a host of representatives from GoU and the developer.

Commissioning Ceremony of the Nyamwamba Hydropower Project

Figure 21 - The Vice President, HE. Edward Sekandi (L) and Minister of Energy and Minerals, Hon. Irene Muloni Ocially

Commission the Nyamwamba SHP

Figure 22 - The Vice President Greets Jody Lenihan, Managing Director of Africa Ems Nyamwamba Ltd. at the Nyamwamba

Commissioning Ceremony

GET FiT Uganda | Annual Report 2018

he joint implementation of a sizable project

portfolio within a limited timeframe provides

a unique and important opportunity for

knowledge transfer between ERA and the GET

FiT Implementation Consultant. Following requests

from ERA, specic areas of knowledge transfer closely

linked to the implementation of the GET FiT portfolio

were established and are now being implemented. In

2017, a Concept Note outlining a range of activities was

developed by ERA with support of the Implementation

Consultant (Multiconsult), and the following areas of

knowledge transfer were selected. The knowledge

transfer is funded by DFID.

1. Management of renewable energy projects under

construction.

2. Follow-up of environmental & social compliance for

renewable energy projects.

3. Design optimisation for small hydropower plants.

4. Determination of Return on Equity in the Ugandan

electricity supply industry.

Item 4 above was concluded in 2018: In the

determination of the Ugandan Renewable Energy

Feed in Tari in 2016, assumptions were made by ERA

regarding the applicable Return on Equity (ROE) for the

respective technologies. However, ERA lacked a clear

methodology for determination of ROEs. In order to

provide more certainty to developers during investment

decisions, ERA needed to establish a methodology and

model template. To address these needs, ERA, with

support from the Consultant, developed a regulatory

framework document for the determination of Return

on Equity in the Ugandan electricity sector and an

associated Excel model for calculation. The work was

carried out during the rst half of 2018 and included

a one-week workshop and training in Kampala for ERA

sta, organised by the Consultant as part of the GET FiT

knowledge transfer component.

Items 1 to 3 were integrated in the activities of ERA

together with the Implementation Consultant during

supervision visits and through the organisation of

workshops, establishment and institutionalisation

of procedures and checklists, as well as discussions

on practical and academic matters. A knowledge

transfer planning session between the Implementation

Consultant and ERA was undertaken during the

Q2 2018 supervision visit, and capacity building

requirements identied in relation to the engineering

design and construction supervision of hydropower

projects. In addition to the sharing of knowledge and

experiences during jointly undertaken supervision

visits, capacity building in relation to Health & Safety

aspects was particularly highlighted by the ERA team

as an important learning area. In that regard, training

and reference material in relation to key construction

activities such as working at height and with scaolding

systems, excavation practices, the use of personal

protective equipment, etc. were shared. Additionally,

identication and documentation of design

issues, inspection procedures, and checklists

were developed further prior to an initial workshop

between key Multiconsult and ERA team members in

Kampala in Q3 2018. Further workshops are planned

during the rst half of 2019 to consolidate and nalise

the procedures and checklists and to plan for the

preparation of institutionalised documents to be used

by ERA in the future.

ERA’s environmental and social sta worked with the

Implementation Consultant in developing guidance

material, undertaking joint construction supervision and

post-COD visits, and in analysing lessons from GET FiT

projects as the basis for practically oriented knowledge

transfer. Environmental and social checklists

reecting both Ugandan regulations and international

standards have been drafted, tested and rened during

supervision visits and will be nalised in the rst half

of 2019. The checklists refer mainly to hydropower

project development, construction and operation - and

will feed into ERA’s work in reviewing applications for

feasibility study permits and generation licences, as

well as the compliance monitoring for licensed projects.

Lessons are being analysed and documented with the

objective of preparing conference papers and journal

articles for dissemination in and beyond Uganda and

based on the unique sample of project lessons that the

GET FiT portfolio represents.

Knowledge Transfer

7.2

GoU and KfW | Multiconsult

xperience from GET FiT implementation has

indicated that integrated sector planning has

not received sucient attention in the quickly

expanding Ugandan power sector in recent

years. Generally, it has been observed that the Ugandan

electricity sector would benet from a clearer policy on

the role of private and public sector actors and improved

predictability in long term sector planning. Integrated

generation, transmission, distribution and consumer

investment planning would reduce underutilisation

of assets in certain sub-sectors or regions. Moreover,

improved nancial planning and optimisation along

the electricity sector value chain would enable more

ecient use of funds and contribute to reducing

nancial costs and technical losses.

Despite the considerable success of the GET FiT Uganda

Programme to mobilise private sector investments

into new renewable energy projects, several areas of

potential improvement have been recognised across

the various frameworks and processes involved.

This has particularly been related to procedures for

ensuring timely and adequate grid connection for IPPs,

as well as electrication potential in the vicinity of new

projects. DFID has engaged an external consultant to

identify potential measures to improve the framework

for energy access around new IPPs and the capacities

of relevant GoU institutions. To this end, DFID has

identied three key areas for potential future support

to ensure the sustainable transformation of the small to

medium sized electricity generation market in Uganda:

1. Possible electricity access for communities close to

generation sites

2. Contracting with developers and provision of

necessary grid infrastructure

3. Environmental and Social Safeguards

During development of renewable IPPs in the GET FiT

Uganda portfolio, reinforcement of local networks is

being undertaken to accommodate evacuation of power.

However, this does not necessarily lead to increased

electricity access for local communities, which is the

mandate of either REA or local distribution companies.

Introducing local electricity access as an integrated or

related component in IPP development can be one way

to increase positive economic impacts locally, and to

maintain or strengthen local support for IPPs. On this

basis, part of the consultant’s scope will be to map out

the electricity needs of aected communities and look

at how this may be addressed during or after project

implementation. Adequate integration of international

standards for environmental and social compliance will

also be a key aspect in this regard.

Eorts towards Integrated Sector Planning

7.3

GET FiT Uganda | Annual Report 2018

n February 2018, the second GET FiT Programme -

GET FiT Zambia - was ocially launched in Lusaka.

This represents a major achievement for GET FiT and

strengthens its prospects in Sub-Saharan Africa.

The Programme aims to support the Zambian

Government in the implementation of its REFiT

Strategy, which was published in late 2017. In line with

this Strategy, the Programme aims to procure 200 MW

of renewable energy projects in the next three years.

Similarly to GET FiT Uganda, the focus of GET FiT Zambia

is small-to-medium projects with up to 20 MW in

capacity from IPPs – also in line with the Zambian REFiT

Strategy. The Programme received a funding pledge of

circa EUR 31 million from the German government.

The rst phase of the Programme has been launched

with a 100 MW Solar PV tender. The RfQ was

successfully completed with the announcement of ten

shortlisted applicants in June 2018 – followed by the

submission of proposals in November 2018. Fifteen

project proposals from eight bidders were received.

Besides its solar component, GET FiT Zambia also

includes the procurement of 100 MW in hydropower.

The Prequalication for the 100 MW hydro tender

launched in January 2019. Moreover, a 5 MW solar

micro-generation window is foreseen, designed to

facilitate participation of local companies in the power

sector and contributing to local capacity building and

leveraging of Zambian investments.

An additional focus is to encouraging the private sector

to take a stake in the energy sector to strengthen

the Zambian power market. As such, increasing the

institutional capacity, as well as the policy and regulatory

framework for renewable energy IPPs in Zambia is an

essential aspect of the Programme.

Similarly to GET FiT Uganda, GET FiT Zambia is

implemented by KfW, through the Programme

Implementation Consultant, Multiconsult. The Zambian

Ministry of Energy (MoE) is the owner of the Programme.

Other key stakeholders include the Zambian Energy

Regulation Board (ERB) and the state-owned power

utility Zesco Ltd.

GET FiT Zambia Launch

7.4

GoU and KfW | Multiconsult

lthough a Renewable Energy Feed-in Tari

(REFiT) was introduced in Mozambique

in 2014, private investments in renewable

energy projects have not yet materialised as

expected. More incentives such as tari support and risk

mitigation are needed to harness private investments

in renewable energies in the country. Therefore, the

Government of Mozambique is intending to implement

a GET FiT Programme. To prepare the Programme, a

design and implementation study, nanced by the

Government of the United Kingdom through KfW,

was undertaken in 2018. GET FiT Mozambique aims to

support about 140 MW of renewable energy projects

nanced by IPPs within the next years. Potential

activities within the project are tari support for IPPs’

investments as well as the establishment of a facility for

grid integration and risk mitigation. The project is in its

preparation phase. Implementation is planned to start

in 2020. The German government has committed 25

million Euro in support of GET FiT Mozambique which

will be implemented through KfW. Additional nancing

will be requested from other development partners.

The Interim Renewable Energy Feed-in Tari

Programme (Interim-REFiT) was introduced in

Namibia in 2015 and will contribute to mobilising

private investments into small-scale energy projects

with a total capacity of 70 MW. However, the Namibian

Interim REFiT Programme attracted investments

mainly into solar energy, whereas investments into

other renewable energy resources did not materialise

as expected. Namibia is particularly interested in

supporting the utilisation of encroacher-bush, as more

than one third of Namibia’s surface is covered by it as

a result of intensive farming. The bush encroachment

suppresses the growth of grass, reduces biodiversity

and reduces the penetration of rainwater required

to recharge the all-important underground water

resources.

In order to explore the utilisation of encroacher bush

as a renewable resource for electricity generation,

the Government of Namibia has requested KfW to

undertake a detailed design and implementation

readiness study to develop a programme concept for a

GET FiT Programme ‘bush-to-electricity’ in Namibia. The

study is nanced by the Government of Germany and

will be concluded during the second quarter of 2019.

Based on an earlier commitment by the German

Government, in December 2017 KfW signed a nancing

agreement with the Government of Vietnam over EUR

14.5 million for the Renewable Energy Development

Facility GET FiT Vietnam. Additional nancing of EUR

14 million has been requested from the EU but has not

been committed. Implementation details remain to be

discussed with the main Implementing Partner, the

national power utility Electricity of Vietnam, so that the

GET FiT facility is expected to be operational by mid/

end 2019.

GET FiT Roll-Out in Other Countries

7.5

Note: Net amounts are based on funding disbursed to the Programme thus far, projected exchange rates for undisbursed funds and deduction of management fees.

Donor

Norway 15,590,475

UK DFID

UK BEIS

Net Amount Committed (EUR)

GER BMZ

EU ITF

Total

28,262,050

14,128,113

15,000,000

20,000,000

92,980,638

GET FiT Uganda | Annual Report 2018

Funding Commitments

8.1

Financial Status

ET FiT Uganda is a results-based Programme

– that is, a subsidy is paid following the

successful installation of power capacity

and the delivery of power – and is therefore

dependent on predictable commitments from sponsors

in order to be successful. Since the commencement

of the Programme in 2013, several changes to the

portfolio structure and signicant project delays have

necessitated active follow-up and exibility from all

Foreign exchange rate developments within the

nancial structure of the Programme reduced the

overall budget by approximately 13 % as of mid-2015.

Subsequently, a EUR 1.5 million budget buer was

introduced to cushion future decline in the EUR/GBP

rate until remaining disbursements were made to KfW

and converted in EUR. Reference is made to previous

GET FiT annual reports.

To date, EUR 93 million has been committed to the Programme.

stakeholders. This requirement has indeed also been

met by the GET FiT funders to date, enabling the

Programme to deal with any arising uncertainties and

risks in a relatively comfortable and pro-active manner.

To this end, four development partners have taken up

the challenge and provided GET FiT with the necessary

funding: Government of Norway, Government of UK

(through BEIS and DFID), Germany (BMZ) and the EU

(through EU ITF).

A limited amount of undisbursed donor contributions

remains at this stage, currently equivalent to

approximately 8 % of the total GET FiT budget and are

therefore still subject to foreign exchange risk. GET FiT

regularly monitors the relevant forex developments to

allow for proactive actions if needed.

Table 4 - Overall Donor Commitments to GET FiT

GoU and KfW | Multiconsult

Disbursement Projections

8.2

Committed disbursements from the GET FiT Programme go towards four purposes:

i. project grants, with 50 % paid at commercial operation date and 50 % paid in the form of results based

support over the rst ve years of operation, subject to actual generation,

ii. consultants under the Technical Assistance Facility for ERA,

iii. consultants for the overall management and monitoring of the Programme, and

iv. management fee to KfW.

Figure 23 illustrates the actual (up to and including 2018) and projected disbursements from the Programme. The

projections are based on the status of the project portfolio and expected progress. Due to the provision of results-

based disbursements during the rst ve years of operation for each project, the nal payments from GET FiT will

not occur before 2024.

For the disbursement projections, the main uncertainty

relates to actual COD for the various projects. Delayed

implementation of the portfolio has already shifted the

disbursement prole of the Programme considerably.

With most projects now nancially closed and under

construction, future changes in the disbursement

prole will be linked predominantly to construction

related risks. There is also some uncertainty tied to

the annual result-based payments for each project.

Since the developers will only be paid for what they

are producing (with a cap at their planned average),

signicant under-production across the portfolio may

lead to accumulation of excess funding.

The annual GET FiT Steering Committee (SC) meeting

was held on April 24, 2018 in Kampala in the presence

of representatives from the German Embassy, DFID,

BEIS, the European Union, ERA, the Embassy of Norway,

MEMD, KfW and the GET FiT Secretariat (Multiconsult).

During the meeting the current implementation status

of the Programme was presented, and challenges

relating to the grid integration and power evacuation

Note: Projections are subject to uncertainty, mainly related to individual project progress

Figure 23 - Projected Annual Payments (Premium Payments and Consultants) under GET FiT

Million EUR Accumulated

Million EUR

Total, accumulated

GET FiT Uganda | Annual Report 2018

were highlighted by the GET FiT Secretariat. This was

complemented by an update of developments in

the power sector by ERA and MEMD. A key topic of

the meeting was the funding status, budgeting and

disbursement of Programme funds – the SC concluded

that no disbursements to projects will be made after

2023, which is in line with the initial window of GET

FiT support. The SC also decided that an exception is

made for the Kikagati SHP, upon the consideration of

transboundary issues the project was facing.

Figure 24 shows the relative shares of the various cost

components under the GET FiT Programme, based on

current budget reservations. Overall, approximately 10

percent of the overall funds are tied to management,

implementation and the Technical Assistance Facility,

while 90 percent of the total commitments are expected

to be disbursed as premium payments.

Figure 24 – Distribution of Budget Reservation of GET FiT Uganda

GoU and KfW | Multiconsult

GET FiT Uganda | Annual Report 2018

Programme Monitoring

9.1

he GET FiT Monitoring and Evaluation

framework monitors the results of the

Programme through several quantitative

indicators, which are collected from project

developers and key sector stakeholders on a semi-

annual basis. The Programme’s monitoring and

evaluation is structured in a logical framework

(Logframe) outlining the relationship between targeted

Outputs, Outcomes and Impacts and setting baselines,

expected milestones and targets.

The Programme is still behind schedule on achieving

the original capacity targets, which aimed at full

commissioning of the RE portfolio by the end of

2018. This is mainly due to the many delays in

bringing individual RE projects to nancial close and

construction start. However, after years of intensive

eorts and a good number of projects (10 out of 17)

now commissioned, the Programme is progressing well

on most of the targeted results.

Due to a lower portfolio share of biomass projects than

originally anticipated, and a signicant reduction in

Programme funding, the original capacity targets (170

MW installed and 830 GWh/year) of the portfolio will

not be fully achieved. Other indicators that are directly

linked to these capacity targets, such as private nance

mobilised and displacement of thermal generation,

may also be aected by the overall capacity reduction.

The current GET FiT portfolio has a planned capacity of

158 MW and 765 GWh/year, of which more than half

has now been commissioned.

On some indicators, such as job creation, the

Programme is already exceeding original targets.

An overview of the targeted Outputs, Outcomes

and Impacts is provided in the overview below. The

following section will address these goals in more depth,

providing details and context on the development of

the Programme.

Programme Monitoring &

Risk Management

Outputs Outcomes Impact

1. Increased small scale RE

capacity & generation.

1. Improved private sector

investment environment for

renewable energy in Uganda.

Uganda pursues a low carbon,

climate resilient development

path, resulting in growth,

poverty reduction and climate

change mitigation.

2. Balanced portfolio of RE

techologies.

2. Improved nancial

stability of energy sector.

4. Increased number of

Ugandan national jobs.

6. Finance mobilised for

GET FiT portfolio.

3. Reduced GHG emissions.

5. Increased capacity of ERA.

GoU and KfW | Multiconsult

he Programme made good progress on a range

of Programme monitoring indicators in 2018.

Electricity generation picked up considerably

with over 270 GWh delivered to the grid during

the year, representing approximately 65 percent of

the entire portfolio generation to date. This is still

signicantly lower than the expected annual generation

of commissioned projects, due to commissioning of

projects during 2018, and grid-related issues causing

high deemed energy levels for certain projects. With ten

projects now to produce a full year and others set for

commissioning, overall portfolio generation is expected

to substantially increase in 2019.

In terms of geographic and technological diversication,

GET FiT is represented in most sub-regions of the

country and supports three renewable energy

technologies. While projects were received during the

appraisal stage, Northern Uganda is the only region

with no GET FiT project in the portfolio, while the rest of

the portfolio has a strong presence in Western Uganda,

but is also represented in Central, Eastern and South-

Western parts of the country. The portfolio includes

projects with three technologies – Solar PV, Hydro and

Bagasse – and is thereby diversifying the Ugandan

energy mix.

With an increasing level of energy generation, the

Programme portfolio is contributing to reducing

Uganda’s GHG emissions. According to UETCL, energy

generation from the GET FiT portfolio is currently

osetting generation from the available grid connected

thermal (fossil fuelled) power plants. However, due to

the overall implementation delays for the portfolio, GET

FiT is not yet able to oset all the thermal electricity

generation to the Ugandan grid. This is particularly due

to an unusually high level of export from Uganda to

Kenya in 2018, which has led to increased dispatch of

the thermal generators. It will be exciting to see to what

extent GET FiT can continue to oset thermal generation

in 2019, particularly while awaiting commissioning

of the new large hydropower plants in Uganda which

should lead to further displacement of thermal energy

generation.

The GET FiT portfolio has direct eects on the local

economy and made a substantial contribution to local

job-creation. This is represented by over 8,500 newly

created jobs (FTE’s – Full Time Equivalent) in relation to

the portfolio alone, by far exceeding the initial target.

The share of Ugandan employment is around 90

percent.

Finally, GET FiT projects have raised over USD 450

million in investments for the portfolio – approximately

USD 160 million in private, and USD 190 million in

public funding. Private nancing represents a share

of approximately 35 percent. All but one project has

achieved nancial close, and the Kikagati SHP expects

to reach nancial close in the rst half of 2019.

An overview of all Output indicators is presented in

Table 6.

Outputs

Table 5 - Overview of Impact, Outcomes and Outputs

All Projects that have achieved nancial close are included. MW of commissioned projects in brackets.

All Projects that have achieved nancial close are included, based on their planned annual energy production. Actually delivered energy of commissioned

projects are in brackets.

GET FiT Uganda | Annual Report 2018

Table 6 - Output Indicators

Target

2023

Status

2018

Target

Achieved

CommentIndicator

Output 1 – Increased small scale renewable energy capacity and generation

Output 2 – Balanced portfolio of renewable energy technologies

Output 3 – Reduced GHG emissions

Output 4 – Increased number of Ugandan national jobs

Output 5 – Increased capacity at ERA

Output 6 – Finance mobilised for GET FiT portfolio

Indicator 1.1

MW installed

Indicator 1.2

GWh/year delivered to the

national grid

Indicator 2.1

Number of technologies

supported by GET FiT

Indicator 2.2

Number of sub-regions with

GET FiT projects

Indicator 3.1

Net change in GHG emissions

(Cumulative MtCO2e)

Indicator 4.1

Number of direct national con-

struction and O&M jobs created

Indicator 5.1

Time taken by ERA to review

generation licence for 1-20 MW

renewable energy applications

(months)

Indicator 5.2

Number of REFiT tari reviews

taking place by ERA per year

Indicator 6.1

Private nance mobilised for

GET FiT portfolio (in USD million)

Indicator 6.2

Public nance mobilised for GET

FiT portfolio (in USD million)

Indicator 5.3

Timely and complete reporting

to ERA by licensees

170

(158.4)

830

(765)

84%

78%

75%

80%

11%

206%

n/a

66%

79%

142.4

(87.1)

650.2

(270.8)

0.45

8,658

1.1

131

237

79%

4.03

4,200

200

300

100%

The current portfolio has a

planned capacity of 158.4 MW.

The original target of 170 MW

will not be achieved due to lower

availability of Programme funds

and a lower share of biomass

projects than originally expected.

Commissioned projects have an

expected annual generation of

399 GWh. The current portfolio

has a planned total output of ap-

proximately 765 GWh/year.

Supported technologies include

hydropower, solar PV and ba-

gasse.

The GET FiT portfolio includes 4

regions: Western, South-West-

ern, Eastern and Central.

Power generated from the GET

FiT portfolio is currently oset-

ting thermal generation and

reducing GHG emissions. The

indicator is behind target due to

the delayed portfolio implemen-

tation.

GET FiT is exceeding targets on

this indicator. Approximately

2,700 full-time equivalent (FTE)

jobs were created in 2018. The

accumulated 2018 gure has

been adjusted for an error in

employment gures reported in

2017.

The time to review generation li-

cence applications has decreased

considerably from approximate-

ly 2 months in 2017 to about 1

month in 2018.

Taris were revised in 2016 for

the period 2016-2018. Another

REFiT review is currently ongoing.

Only projects having reached -

nancial close are included. The

current portfolio estimate is at

USD 162 million.

Only projects having reached -

nancial close are included. The

current portfolio estimate is at

USD 291 million.

24 out of 31 licensees have sub-

mitted required reports com-

plete and on time.

GoU and KfW | Multiconsult

he outcomes address the inuence of GET FiT

at a higher sector level, namely on the private

sector investment environment for renewable

energy in Uganda, and improved nancial

stability of the energy sector. A third indicator on local

grid stability has been excluded from the logframe in

2018.

Currently four commercial banks are nancing projects

of the GET FiT portfolio, while the Kakira project debt

is entirely nanced through commercial debt. As

further projects are restructuring debt in the future, it

is expected that more commercial banks will become

involved in the Ugandan energy sector.

The regulator has issued only one development

permit in 2018; however, seven generation licences

for renewable energy projects with capacities under

20 MW, including six hydropower projects and one

bagasse project. As highlighted in the Output section,

the process of issuing generation licences has seen

certain improvements as well, with a substantial

decrease in review time of applications.

While the power utility UETCL has paid all its invoices

for delivered energy in 2018, four developers have

reported defaults on payments for deemed energy

claims. However, the respective invoices for deemed

energy were approved by ERA and subsequently paid

in early 2019. These defaults are not considered for the

indicator since deemed energy claims are not approved

for payment by UETCL, but by ERA through the base

consumer tari, which is reviewed to include deemed

energy only once a year.

The Government is currently not subsidising any

thermal generation, and the GWh purchased from

thermal power stations is at circa 200 GWh, well below

the target of 832 GWh in 2023. However, capacity

payments remain part of a subsidy by the Government,

which signies that the country has not yet achieved

fully cost-reective retail taris.

An overview of the Outcome indicators is provided in

Table 7.

Outcomes

The indicators for Outcome 3 – Improved local grid stability have become inadequate in monitoring Programme performance due to various sector developments, particu-

larly due to the many changes in regional and national grid infrastructure and particular network solutions for GET FiT projects. Following discussions regarding the data

availability, validity and attribution (as Programme results), it was decided to remove both indicators for Outcome 3 (voltage variations and load loss at local substations)

from the logframe. Notably, the TA provided by DFID via GET FiT on compliance monitoring is aimed at making grid performance data in Uganda more precise and accessi-

ble. Therefore, Outcome 3 might be re-introduced at a later stage.

GET FiT Uganda | Annual Report 2018

Target

2023

Status

2018

Target

Achieved

Outcome 1 – Improved private sector investment environment for renewable energy in Uganda

Outcome 2 – Improved nancial stability of the energy sector

Indicator 1.1

Number of commercial banks

that invest in renewable energy

for project nance lending for

GET FiT projects

Indicator 1.2

Number of development permits

and generation licences issued

by ERA per year

Indicator 1.4

REFiT adjusted to be cost-reective

(in percent)

Indicator 2.1

Subsidy paid by the Government

for UETCL to cover thermal power

use

Indicator 2.2

GWh purchased by UETCL

from thermal stations

Indicator 2.3

Cost-reective retail taris

(in percent)

Indicator 1.3

Occurrence of annual “UETCL

event of default” for energy

supplied (deemed energy)

100%

832

100%

95%

80%

67%

n/a

100%

95%

199

Kakira has achieved full commer-

cial bank debt. Currently, no Ugan-

da commercial bank is among

lenders, due to a lack of technical

competence and energy sector ex-

perience, according to developers.

7 generation licences and one de-

velopment permit were issued in

2018.

Based on a tari review from

Frankfurt School. REFiTs were ap-

proved by ERA for 2016-2018.

All energy purchased beyond

stand-by capacity was covered by

taris.

The sector is well below target

due to i) lower demand for ther-

mal power than anticipated and

ii) thermal energy being oset by

renewable energy from the GET FiT

portfolio.

Capacity payments remain part of

the subsidy paid by the Govern-

ment. These remained at the same

level in 2018, and cost reectivity

therefore remains at 95 %.

There have been four defaults

reported on deemed energy pay-

ments. The process of deemed en-

ergy payment has been reviewed

by ERA in early January 2019, as

outstanding payments are pro-

cessed in early January.

CommentIndicator

Table 7 - Outcome Indicators

GoU and KfW | Multiconsult

he Programme follows the impact statement

“Uganda pursues a low carbon, climate resilient

development path, resulting in growth, poverty

reduction and climate change mitigation”.

Accordingly, the impact of the Programme is measured

through three indicators, highlighted below. Due to the

heavy reliance on the activities of key sector actors to

reach the targets, the eects of GET FiT Uganda are

limited to a certain extent, and subject to a time lag

between GET FiT activities and observable results at a

higher sector level.

Generally, a positive development on grid-related CO2

emissions can be reported. Increased energy generation

from the GET FiT portfolio led to reduced dispatch of

fossil fuelled power plants in 2018. The indicator is

currently exceeding the target set for 2023. While this

can largely be credited to renewable energy supplied

from GET FiT projects, it is also partly due to a lower

national electricity demand than originally projected.

The country has seen improvements in electrication

rate and electricity consumption per capita. An increase

to 22 % up from 20 % in 2017 has been reported in

2018. Similarly, the electricity consumption increased

by circa 12 % to 101 kWh per capita, compared to 90

kWh per capita in 2017.

Table 8 provides an overview of the Impact indicator

developments in 2018.

Impact

Table 8 - Impact Indicators

Target

2023

Impact Indicators

Comment

Status

2018

Indicator 1

Grid related CO2 emissions per unit

electricity use

Indicator 2

Percent of population with access

to electricity

Indicator 3

Electricity consumption

(kWh per capita)

0.09

26.4%

105

0.037

22%

101

Grid related CO2 emissions decreased

compared to 2017 from 0.042 to 0.037,

which can be attributed to lower ther-

mal generation in 2018.

Electrication rate has increased from

20 percent reported in 2017.

Electricity consumption per capita was

at 90 kWh in 2017 - and has seen an in-

crease in 2018.

GET FiT Uganda | Annual Report 2018

isk management is a continuous process

running through the lifetime of a programme,

where risks are identied and categorised, and

measures introduced to reduce or eliminate

the risks.

Grid connection. Grid connection problems are already

signicantly reducing the extent to which energy

from GET FiT projects is being delivered to Ugandan

consumers. While the overall energy produced from

the GET FiT portfolio in 2018 (271 GWh) is by far the

highest level to date, the total deemed energy across

the portfolio totaled approximately 25 GWh. Further

to this, projects due to commission in 2019-20 are

also likely to generate considerable deemed energy

due to outstanding grid infrastructure issues in 2019-

2020. In addition to the mere energy lost for Uganda,

this situation has introduced an increasing level of

deemed energy obligations on GoU, which represents

as a reputational risk for the GET FiT Programme. On

this basis, the risk category is maintained with a high

probability and high impact.

Project construction delays. Although ten GET FiT

projects are now commissioned, seven projects remain

under construction which represent approximately 45

percent of the total portfolio capacity. Certain projects

have recently demonstrated unsatisfactory progress

due to design and construction challenges and it is

likely that some of these will not meet their extended

deadlines (October 2019 for most projects). This will

lead to subsidy reductions and thereby aect project

viability and increase supervision cost. Therefore,

project construction delays remain as a key risk towards

achieving GET FiT capacity targets in a timely manner.

This risk category is still rated with high probability and

high impact.

Health, Safety and Environment (HSE). HSE risks across

the portfolio have become increasingly real over the past

year, with all projects now under construction. Despite

projects being pushed on maintaining timelines, it is

crucial that this does not compromise HSE performance

in any way. GET FiT is not positioned to supervise or

control the quality of developer’s HSE work on a daily

basis, and these risks are therefore not formally part of

the GET FiT risk control framework. Nonetheless, GET

FiT supervision visits focus on monitoring performance

in that respect to the extent possible, discussing HSE

standards with developers and creating awareness

around potential risks.

An overview of the most relevant remaining risks across

the Programme is presented in Table 9.

Risk Management

9.2

GoU and KfW | Multiconsult

Table 9 - Overview of Key Risks

Description of Risk Progress

high

medium

Risk

Assessment

Mitigation Actions

Deemed commissioning of projects

due to poor coordination between

developers and network operators,

as well as missing funds, to ensure

the infrastructure for grid connec-

tion.

Construction delayed or genera-

tion not at full capacity due to con-

straints of the national grid (HV/

MV).

Corruption, misuse of funds and

bribes paid by developers or con-

tractors.

Compliance with Environmental

and Social standards of developers.

Lower generation than estimated

due to insucient hydrological data

and/or climate change.

Insucient Programme funds due

to foreign exchange rate develop-

ments.

Insucient understanding of

ground conditions results in sub-

stantial changes in the design and

layout of projects and/or adverse

environmental and social impacts

as a result of landslides or similar

during construction.

Close constant follow-up with GoU,

network operators and develop-

ers as project commissioning ap-

proaches.

Funding for the critical grid invest-

ments has been secured through

DFID to ensure power evacuation

for GET FiT Projects.

GET FiT is participating in the joint

sector planning group for GET FiT

interconnection and engaged in the

analysis of deemed energy scenari-

os for the sector.

Subsidies are performance-based

and disbursed for energy delivered.

Zero tolerance in developer’s con-

tracts, and termination of contracts,

as well as repayment of fees in case

of paid bribes.

Workshops on E&S standards were

provided to developers. Penalties

for non-compliance are incorpo-

rated in subsidy agreement (DFA).

Additional supervision visits are

carried out for critical projects.

Risks were included and diligently

assessed in hydrological estimates

and sensitivity testing at project

evaluation stage.

Continuous budget monitoring al-

lows for pro-active nancial man-

agement and early identication

of risks and Steering Committee

action if needed.

Developers required to provide

updates on geotechnical condi-

tions in the location of key project

structures and in high risk areas

during the implementation phase

based on further investigations

and assessments by geotechnical

engineering specialists. Develop-

ers requested to address key geo-

technical risks through changes in

project designs and construction

methodologies.

Addressing risk with MEMD has in-

creased the awareness and sped

up processes at the responsible

entities.

The risk of a deemed commission-

ing of at least one project remains

high.

Contractors were mobilised for

33kV reinforcements in Western

Uganda and construction of Opuyo

substation started in September

2018.

The risk of delays and deemed en-

ergy remains high due to an overall

lack of progress on these grid inter-

ventions.

General risk remains until the com-

missioning of all projects.

Some projects still perform unsat-

isfactorily. GET FiT has carried out

multiple additional supervision

visits, and imposed penalties on

some developers. Compliance is

continuously followed-up, includ-

ing post commissioning. The risk

of non-compliance and associated

reputational risks remain.

Generation data for all projects is

continuously followed up by GET

FiT. The realisation of hydrological

risks can only truly be assessed in

the fullness of time, following a sus-

tained period of generation (multi-

ple years).

Low risk level on original Pro-

gramme budget (premium pay-

ments) due to most funds already

disbursed there. Medium risk level

remaining on grid connection com-

ponent, where a funding shortfall is

likely.

Several projects implemented

changes in designs and construc-

tion methodologies in 2018 to im-

prove the robustness of project de-

signs and to reduce the likelihood

of landslides. Further changes may

be necessary for remaining projects

during 2019 to manage residual

risks.

GET FiT Uganda | Annual Report 2018

n 2019, the Programme’s focus will be on a close

follow up towards the seven hydropower projects

that are still under construction. These projects

have already been granted extensions beyond

the original window for GET FiT funding, and further

delays will jeopardise their continued support from

the Programme. Demonstrated eorts and progress

is therefore key, and the GET FiT implementation

consultant will undertake quarterly supervision visits

for each project until COD is achieved. While it has

already been established that one project will not

reach COD until 2020, the other six are still targeted for

completion by end of 2019.

To what extent the remaining projects will successfully

achieve CODs during 2019 is subject to concerns.

Some of the projects demonstrated poor progress in

late 2018 and other projects are still facing signicant

risks related to grid connection. For several projects

required grid extensions and reinforcements for

adequate connection have not yet been implemented,

with unsatisfactory progress throughout 2018. GET

FiT will continue to push GoU entities on fast-tracking

critical grid upgrades, also in 2019. This is important

to safeguard the viability and reputation of the sector

and to minimise the level of deemed energy payment

obligations on GoU.

While remaining projects under construction are

indeed a top priority, the GET FiT portfolio now has ten

operational projects that require some level of follow

up and support. The rst years of operation are typically

both technically and nancially challenging, which

evidently is also the case for recently commissioned

GET FiT projects. Some projects are still struggling to

evacuate power at full capacity due to remaining grid

connection issues. Several developers have claimed

deemed energy compensation due to grid outages and

are currently in a process of retrieving payments for

the same. The performance of Government agencies,

network operators and developers themselves through

these processes is highly important, and viable working

relationships and routines must be well established to

last for the next decades. GET FiT is monitoring these

developments and stand ready to facilitate constructive

discussions if needed. A sucient level of GET FiT

involvement and understanding of ongoing issues is

also important from a results-based subsidy payment

perspective.

Finally, we are pleased to see that the GET FiT concept

is now being rolled out or considered in a range of

new countries. For GET FiT Uganda, which is moving

towards the end of a successful implementation, it

will be important to contribute to the wider roll-out by

continuing to share experiences and lessons learned.

Outlook for 2019