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Annual Report 2016

GET FiT UGANDA | ANNUAL REPORT 2016
PAGE 3
ANNUAL REPORT 2016
This report including all content and
illustration has been prepared by
In cooperation with
and
The Electricity Regulatory Authority continues
to recognize the great role played by the GET
FiT program in supporting Uganda towards
achieving the policy objective regarding the
prioritization of renewable energy in the
national generation mix.
Eng. Ziria Tibalwa Waako,
AG. Chief Executive Ofcer
MESSAGE FROM ERA
GET FiT UGANDA | ANNUAL REPORT 2016
PAGE 5
T
he year 2016 saw the impact of the GET
FiT program on Uganda’s Electricity
Supply Industry grow from strength
to strength. In addition to the six (6)
hydropower projects that broke ground in 2015,
construction works began for six (6) more power
plants in 2016 and early 2017, bringing the total
of the planned installed capacity from the GET
FiT projects currently under construction to 86
M W.
Furthermore, on December 12, 2016, the Ugandan
Electricity Supply Industry through GET FiT
support achieved yet another major milestone
of commissioning the first grid connected Solar
Photovoltaic Plant in the country. The 10 MW
grid connected Solar PV plant located in Soroti
by Access Uganda Solar Limited is the largest of
its kind in the East and Central African region.
The development of this solar project, has gone
a long way to demonstrate how synergies of
Development Partner and hosting government
support can be utilized to harness private sector
capital for infrastructure project development.
The Electricity Regulatory Authority continues
to recognize the great role played by the GET
FiT program in supporting Uganda towards
achieving the policy objective regarding the
prioritization of renewable energy in the national
generation mix. Monitoring of projects under
construction is on-going so as to enable them to
achieve Commercial Operations Dates as per the
respective implementation time plans.
The Electricity Regulatory Authority would
further like to salute the GET FiT program for
the Technical Assistance facility which has
enhanced ERAs processes in regulating the
Electricity Supply Industry. Particular emphasis
of the Technical Assistance facility was placed
on Due-diligence for licensing, evaluation and
monitoring of projects, financial and tariff
modelling, and standards for interconnection and
wheeling arrangement. The facility has enabled
the Authority to build capacity to ensure long
term sustainability beyond the GET FiT Program.
It is notable that the implementation of the GET
FiT program saw Uganda become one of the best
Renewable energy investment destinations and
gain international recognition. The Bloomberg
ratings of 2016 rated the country 2nd best with
regard to Renewable Energy investments in
Africa. In an effort to maintain the favourable
Renewable Energy Investment climate, the
Authority with support from the GET FIT program
revised the Renewable Energy Feed in Tariffs in
July 2016 in order to sustain the level of financial
viability of the potential projects to ensure that
the country remains one of the best investment
destinations on the African continent beyond the
GET FiT program.
The Authority appreciated the continued support
from development partners towards construction
of evacuation infrastructure for the GET FIT
projects. As we approach the peak of construction
and commissioning of the GET FIT generation
plants, the Authority shall continue to prioritize
the proper monitoring and coordination of
the construction activities for the evacuation
infrastructure. This will enable a harmonized
commissioning of the power plants.
The Electricity Regulatory Authority is committed
to ensuring efficient and effective implementation
of the GET FIT program and shall continue to make
every effort to achieve sustainable electricity
Supply for social economic transformation.
The Authority looks forward to supporting
Development Partners in sharing the experiences
and lessons learnt during the implementation of
the Uganda GET FiT program, as similar programs
are rolled out in other countries.
Eng. Ziria Tibalwa Waako,
AG. Chief Executive Ofcer
KfW and the German Government have rallied
development partners Norway, the United
Kingdom and the European Union around
a programme owned by the Government of
Uganda, reducing the transaction costs for
the Government. This is effectiveness!
Kristian Schmidt,
EU ambassador to Uganda
MESSAGE FROM EU
GET FiT UGANDA | ANNUAL REPORT 2016
PAGE 7
D
ear readers,
on the 12th of December 2016, we
celebrated the inauguration of the first
GET FiT solar plant in Soroti - with
a production capacity of 10 MW the biggest in
Eastern Africa.
The Soroti Solar Plant project is a very good
demonstration on how development partners can
deliver better when they efficiently coordinate
their efforts. The GET FiT programme is also a
real success in this sense. KfW and the German
Government have rallied development partners
Norway, the United Kingdom and the European
Union around a programme owned by the
Government of Uganda, reducing the transaction
costs for the Government. This is effectiveness!
The GET FiT programme in Uganda is the first
one of this kind in the world. Given its success,
it is now being copied in Zambia and Vietnam,
whereas Namibia, Ghana and Mozambique have
also shown interest in the model.
Such a programme would not have been possible
without the strong commitment and the key role
played by the Electricity Regulatory Authority
(ERA). I would like here to pay tribute to the
former CEO of ERA, Dr Benon Mutambi, who
created the model. He designed, together with
Development Partners, this innovative scheme
of a GET FiT Premium to finance and fill the
viability gap for renewable energy projects to be
profitable. He contributed to the improvement
of an enabling regulatory framework for private
sector investment in renewable energy, which is
recognised internationally and that many other
countries now want to emulate. I am convinced
Eng. Ziria Tibalwa, the new acting CEO, will
continue to implement Dr Mutambi’s legacy with
excellence.
Uganda has recently been ranked at the top of
international indexes on investment climate for
renewable energy. Bloomberg’s Climatescope
2016” has ranked Uganda 7th out of 55 developing
countries worldwide and 2nd in Africa for its clean
energy investment climate and policies, showing
a steady improvement after already good results
in 2014 and 2015. In the October 2016 index from
Fieldstone Africa, Uganda was also one of the
Big Five together with Morocco and Egypt. These
are markets in which investment in renewable
energy is compelling. I wish to congratulate the
Government of Uganda for this very good result.
Another 10MW Solar Plant will soon be
constructed in Tororo supported by the EU and
the GET FiT programme. Together with other GET
FiT projects (total 160 MW), it is contributing to
diversifying Uganda’s electricity mix, reducing the
current high dependency on hydropower and the
need for thermal generation, and thus reducing
the emission of greenhouse gases and making
Uganda more resilient to climate change.
GET FiT is therefore part of global efforts to
switch to full renewable energy sources. At the
UN conference on climate change in Paris in
December 2015 and in Marrakech in November
2016, the world reached a ground-breaking
agreement to limit global warming and accelerate
the introduction of renewable energy worldwide.
Uganda may hit international headlines for its
renewable energy success story.
The next challenge for Uganda is now to bring
power to the people. As development partners
we welcome the current reflexion about a new
policy on electricity access and we stand ready
to support the Government of Uganda in that
direction.
Kristian Schmidt,
EU ambassador to Uganda
PAGE 8
GOU and KFW | Multiconsult
769
GW
4200
jobs
17
Pr jects
157 mw
4 Soon to begin
11 UNDER-CONSTUTION
2 Commissioned
Actual progress
on goals*
*based on projects with financial close
10 Mw
commissioned
in 2016
18 GWh
commissioned
in 2016
7 PPAs signed
in 2016
1500 jobs
created in 2016
68
92
59
94
USD in GET FiT
premiums
Leveraging a
total investment
of over USD
Public
financing
Private
financing
57
43
428 M
104 M
GET FiT UGANDA | ANNUAL REPORT 2016
PAGE 9
EXECUTIVE SUMMARY
O
ver the past year, GET FiT Uganda
has taken several considerable steps
towards full materialization of its
project portfolio. As perhaps one the
most important highlights of 2016, eight projects
managed to reach financial close with their lenders
in 2016, thus bringing the total up to 11 out of
17 projects. This effectively means that in terms
of installed generation capacity (MW), 63 percent
of the portfolio is now financially secured. This,
combined with the equally important fact that 74
percent of the portfolio is now under construction
or commissioned (12 out of 17 projects), bodes
for great optimism going into the final years of
Program implementation.
In November, the Soroti solar PV project (10
MW) was commissioned as Uganda’s first on-
grid solar power plant. This milestone for the
Ugandan power sector marked the beginning
of a potentially bright solar powered future for
the country. The official opening attracted great
publicity and manifested the position of Uganda’s
power sector as a progressive one, determined
to reach its ambitious targets for national
electrification through investment in renewables
with private sector involvement.
Following the break-through year of 2015,
where the first six GET FiT hydropower projects
commenced construction, another three were
able to break ground in 2016. Thus after a year
of widespread construction activities across the
hydropower portfolio, 2017 is likely to become
the year of commissioning for the first plants. The
first two are expected to go operational in March,
while several others will follow throughout
the year. With the remainder also commencing
construction within the first few months of
this year, construction supervision and flexible
follow-up of any unforeseen technical issues will
continue to be a core activity of the GET FiT team.
Adding to the above, construction of critical grid
infrastructure for power evacuation of GET FiT
projects will be commenced under the support
of GET FiT development partners. This will not
only cater for successful implementation of the
portfolio, but also strengthen the national grid
and pave the way for further renewable energy
development and electrification. Moreover, ERA
will benefit from improved regulatory frameworks
and comprehensive capacity building in key
areas of its core business through the extensive
technical assistance provided as part of the
Program. Hence, 2017 is likely to become a highly
productive, fruitful and exciting year for GET FiT
stakeholders and the Ugandan power sector.
It is uplifting also to note that the environmental
and social performance across the project
portfolio has improved noticeably in 2016. GET
FiT continues to provide substantial support
to developers in complying with international
standards on issues such as resettlement,
compensation, health and safety. This is vital not
only to safeguard the overall success and legacy of
the Program, but also to build developer capacity
and to ensure sustainable utilization of Uganda’s
small-scale RE potential for years to come. During
GET FiT implementation, some developers have
made impressive improvements in their capacity
to manage a range of environmental and social
issues. As a consequence of GET FiT, there is now
a considerably higher degree of compliance with
Ugandan and international standards than would
otherwise have been observed.
GOU and KFW | Multiconsult
1
2
3
4
5
6
7
8
ABOUT GET FIT UGANDA
PROJECT PORTFOLIO PROGRESS
MANAGEMENT OF ENVIRONMENTAL
OTHER ACTIVITIES AND ACHIEVEMENTS
FINANCIAL STATUS
PROGRAM MONITORING & RISK MANAGEMENT
OUTLOOK FOR 2017
STATUS OF GET FIT ROLL
-
OUT TO OTHER COUNTRIES
& SOCIAL PERFORMANCE
GET FiT UGANDA | ANNUAL REPORT 2016
PAGE 11
COD Commercial operation date
CP Condition Precedent
BEIS Department for Business, Energy & Industrial Strategy
DFA Developer Finance Agreement
DFID Department for International Development
ERA Electricity Regulatory Authority
GFPPM GET FiT Premium Payment Mechanism
GoU Government of Uganda
HPP Hydro Power Plant
IA Implementation Agreement
IC Investment Committee
IDA International Development Association
IFC International Finance Corporation
MEMD Ministry of Energy and Mineral Development
MoFPED Ministry of Finance and Economic Development
M&E Monitoring & Evaluation
PPA Power Purchase Agreement
PRG Partial Risk Guarantee
RFP Request for proposal
SC Steering Committee
TA Technical Assistance Facility
UETCL Uganda Electricity Transmission Company Limited
LIST OF ABBREVIATIONS
OR ACRONYMS
GET FiT UGANDA | ANNUAL REPORT 2016
PAGE 13
ABOUT
GET FIT UGANDA
T
he GET FiT Uganda Program was officially
launched on May 31st 2013. The program,
which has been jointly developed by the
Government of Uganda, the Electricity
Regulatory Agency (ERA) and KfW is designed
to leverage private investment into renewable
energy generation projects in Uganda. GET FiT is
being supported by the Government of Norway,
the United Kingdom, the Government of Germany
and EU through the EU Africa Infrastructure Fund.
The main objective of the GET FiT Program is to
assist East African nations in pursuing a climate
resilient low-carbon development path resulting
in growth, poverty reduction and climate change
mitigation. In Uganda, GET FiT is fast-tracking a
portfolio currently of 17 small-scale renewable
energy (RE) generation projects, promoted by
private developers and with a total installed
capacity of 157 MW. This will yield approximately
770 GWh of clean energy production per year,
transforming Uganda’s energy mix within a period
of 3-5 years, and resulting in:
• emission reductions of roughly 11M tons
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 significantly improving)
access to energy for at least 200.000 additional
households (approximately 1.2M people), also
in rural areas due to strengthening of regional
grids;
• leveraging of close to MEUR 400 in
public and private investments for RE generation
projects with a limited amount of results-based
grant funding.
A more comprehensive description of the specific
tools and approaches applied by GET FiT to
address the challenges faced in the Ugandan
power sector, the governance structure of the
Program and key activities and achievements
so far, is found in the GET FiT Annual Reports
produced since 2013 (www.getfit-reports.com).
1
PAGE 14
GOU and KFW | Multiconsult
Another progressive year
F
ollowing the breakthrough year of 2015
when the first six hydropower projects
started construction after several delays,
2016 was another highly progressive year
for the GET FiT Program. Notably, the Soroti solar
PV project was commissioned as Uganda’s first
on-grid solar power plant. Further to this, four
additional hydropower plants and one solar plant
commenced full construction activities during the
past year. Thus, ten GET FiT hydropower projects
are currently under construction. Of these projects,
four six schemes (depending on construction
progress) are expected to reach commercial
operation within 2017. Finally, the remaining four
hydropower projects in the portfolio which are
still at the development stage are all expected to
break ground within the first half of 2017.
Break-through on project
financing
In 2016 an encouraging eight projects (six
hydropower and two solar) reached the critical
milestone of financial close, bringing the total
to ten out of seventeen. While several projects
had already started construction prior to closing
financial arrangements (using equity), it is vital to
the sustainability of the portfolio and its ability
to achieve targets, that most projects are now
financially closed. This achievement confirms
the progress of Uganda’s renewable energy
investment climate in recent years.
First hydropower commissioning
coming up
Entering 2017, the Program is on the verge
of celebrating the commissioning of the first
hydropower plants in the GET FiT portfolio.
Muvumbe (6.5 MW) and Siti I (6.1 MW) are
both expected to become operational in March.
This will mark an encouraging start to the
operationalization of our hydropower portfolio
and emit positive signals to other developers and
the sector as a whole. The ongoing construction
of Siti 1 SHP is progressing well. Although
the project was largely on track to be the first
hydropower project to commission in late 2016,
the project has experienced delays in shipping
of critical materials. Muvumbe SHP was also on
target for commissioning in 2016, but has been
delayed by a range of external factors, including
i) local political challenges, ii) interconnection
issues and iii) shipping delays.
The next table provides a brief updated status on
PROJECT
PORTFOLIO PROGRESS
Portfolio
Status
2
2.1
GET FiT UGANDA | ANNUAL REPORT 2016
PAGE 15
Construction
start
Commissioning
Q1 2017
Q1 2017
Q1 2017 Q2 2017
Q2 2017
Q3 2017
Q2 2017
Q3 2017
Q1 2017
Q1 2017
Q1 2018
Q4 2017
Q1 2017
Q3 2018
Q4 2017
Q3 2018
Q1 2017
Q3 2017
Q4 2018
Q4 2018
Q4 2018
Q4 2018
Q4 2018
Q1 2018
Q1 2017
Q1 2017
Q1 2017
Q1 2017
key project milestones across the portfolio. Green cells indicate that a milestone has been achieved.
The expected dates for key milestones that have not yet been achieved are otherwise shown. Only
three projects have not obtained generation licenses, while five are still negotiating for PPAs.
PAGE 16
GOU and KFW | Multiconsult
GET FiT UGANDA | ANNUAL REPORT 2016
PAGE 17
Projects
PAGE 18
GOU and KFW | Multiconsult
SOROTI: The First Grid-
connected Solar Power Plant
in Uganda Starts Operations
O
n November 24, 2016, the developer
Access Uganda Solar Ltd (partnership
between Access Power from Dubai and
the French company EREN Renewable
Energy) announced beginning of commercial
operation of the Soroti Solar Power Plant, located
just outside Soroti Town in Soroti District,
Eastern Uganda. The 10 MW plant (32,680 solar
modules on 13 hectares) became the first grid-
connected solar power plant in Uganda, but also
East Africa’s largest photovoltaics plant at date
of commissioning. The Soroti Solar Power Plant
Soroti Solar Power Plant. (photo: Access Power)
will produce around 17,5 GWh each year, which
correspond to clean, low-carbon, sustainable
electricity to 40,000 homes, schools and
businesses in the area.
The GET FiT Investment Committee had approved
the Soroti Solar Project in October 2014, as part of
the Solar Facility for the GET FiT Premium Payment
Mechanism. The Developer signed a Developer
Financing Agreement with Government of Uganda
(represented by KfW) in July 2015, and the 20-
year Power Purchase Agreement with Uganda
Electricity Transmission Company Ltd (UETCL) in
September 2015. Financial close was achieved in
January 2016, and the Engineering, Procurement
and Construction Contractor (Spanish company
Commissioned
Projects
2.2
10 MW
plant
17,5 GWh
P/YEAR
GET FiT UGANDA | ANNUAL REPORT 2016
PAGE 19
TSK) started mobilization in February 2016.
Being the first of its kind in Uganda, the Soroti
project naturally faced a range of regulatory,
technical and financial challenges on its
implementation path. Nonetheless and despite
externally caused delays, the plant was
commissioned only two years after selection for
GET FiT support. This was made possible only
through the continuous and coordinated efforts
of the Developer, ERA, UETCL, KfW/GET FiT and
other stakeholders. Importantly, efforts were
maintained due to a strong, common ambition of
pushing Uganda’s first on-grid solar PV project
ahead.
One of the main advantages of solar power is
that project lead times are among the shortest
of any power generation technology. While it
took approximately nine months to build and
commission the 10 MW Soroti plant, it could
have been achieved in five months had the
developer not experienced external delays due
to customs clearance and damaged equipment
during shipping (transformers). Nonetheless
the implementation of the project was a major
achievement, in particular considering the very
steep learning curve for the sector as a whole.
At peak construction, the plant had over 120 local
workers involved, including engineers recruited
and trained by the Developer. Local trained
employees will also implement the Operation
and Maintenance of the plant.
Mr. Ambrose Kamukama, Electrical Technician, AUSL.
(photo: Multiconsult)
PAGE 20
GOU and KFW | Multiconsult
The USD 19 million plant is financed by a mix of
debt and equity with the senior debt facility being
provided by FMO, the Netherlands Development
Bank, and the Emerging Africa Infrastructure
Fund (EAIF). The GET FiT Program supports the
project with approximately USD 9.5 million, to be
disbursed over a 5 year period.
The inauguration ceremony on December 12,
2016, was attended by Uganda’s Minister of State
for Energy, H.E. Simon D’Ujanga, together with the
EU Head of Delegation to Uganda, H.E. Kristian
Schmidt, the ambassadors of Germany and the
Netherlands Dr. Peter Blohmeyer and Mr. Henk
Jan Bakker, as well as representatives of Access
Power, EREN RE, TSK, ERA, FMO, EAIF, and other
stakeholders.
EU Ambassador and Ambassadors of the Netherlands and Germany join Ugandas Minister of State for Energy H.E. Simon D’Ujanga for the ofcial tape
cutting at the launch of the Soroti Solar Power Plant.
(photo: Delegation of the European Union to Uganda)
KfWs GET FiT programme facilitated the
speedy tendering, nancing, construction and
completion of Access’ PV facility in Soroti,
Uganda. The preparation to a high standard
of key project documents prior to the tender
signicantly reduced both the risk and cost
of development, while the concessionary
element of the tariff enables us to deliver
affordable grid-scale renewable energy to the
state utility
Stephane Bontemps
Managing Director, Access Power
PAGE 22
GOU and KFW | Multiconsult
KAKIRA Cogeneration
20 MW biomass (bagasse from sugar production)
plant in Jinja District, Eastern Uganda. Total
investment is USD 57M with approximately USD
7.1M in GET FIT commitments. Kakira Sugar Ltd.
signed the GET FiT financing agreement in April
2015, and reached official COD when the PPA
was signed in mid-2015. Consequently, Kakira
Sugar Ltd. became the first recipient of a GET FiT
premium payment in September 2015. In 2016,
the total energy production from Kakira was much
lower than anticipated. While planned annual
production for the plant is 147 GWh, delivered
energy accumulated to less than 60 GWh over the
past year. This is due to a reduction in availability
of sugar cane, caused mainly by increased local
competition in the sugar cane market. The latter
affects Kakira operations and fuel supply to the
generation facility, as a significant share of sugar
canes are purchased from outgrower farmers. The
future annual production levels for Kakira are
expected to depend on the outcome of ongoing
discussions regarding regulatory issues for the
sugar market.
Kakira Sugar Estate
20 MW
biomass
147 GWh
delivered
GET FiT UGANDA | ANNUAL REPORT 2016
PAGE 23
Projects
Under Construction
2.3
SITI I
Run-of-river hydropower plant with a planned
installed capacity of 6.1 MW and estimated 29
GWh annual production located in Bukwo District,
Eastern Uganda. Investment of USD 14.8M with
USD 3.6M in GET FiT commitments. Construction
was commenced in March 2015 and Siti I is now
the most advanced hydropower project in the GET
FiT portfolio with expected COD in March 2017.
The final steps of construction are progressing
well. Had the project has not faced delays in
shipping of critical materials, particularly GRP
pipes, even a commissioning in late 2016 would
have been possible (less than 24 months!).
6.1 MW
INSTALLED
29 GWh
P/YEAR
PAGE 24
GOU and KFW | Multiconsult
MUVUMBE
Run-of-river HPP with a planned installed capacity
of 6.5 MW and 31 GWh annual production. The
project located is in Kabale district. Investment of
USD 14.1M with USD 4.5M in GFPPM commitments.
The project commenced construction works
in September 2015 and has progressed well.
Unfortunately, Muvumbe has experienced
some minor delays during the latter stages of
construction due to a range of external factors,
including i) local political challenges, ii)
interconnection issues and iii) shipping delays.
Nonetheless, the project is still on track for COD
in March 2017 and will become one of the first
GET FiT hydropower projects to be operational.
6,5 MW
INSTALLED
31 GWh
p/year
NKUSI
Run-of-river HPP with a planned installed capacity
of 9.6 MW and 46 GWh in annual production.
The project is located in the Kibaale and Hoima
districts. Investment of USD 23M with USD 6.5M
in GFPPM commitments. The project commenced
construction in June 2015, and expected COD
is in Q1 2018. Nkusi HPP has several unique
features, with access only by barge and boat via
Lake Albert and a spectacular access to the intake
via a suspended footpath navigating the vertical
cliffs over Nkusi falls. It is the only GET FiT
project designed with a tunnel, and the developer
struggled to obtain viable quotations from
tunneling contractors. They therefore decided to
go ahead and construct the tunnel themselves,
directly employing staff and procuring tunneling
machinery. The project is currently facing
interconnection challenges. A planned 132/33
kV substation nearby will be vital to ensure
full power evacuation, but implementation is
currently behind schedule. ERA, GET FiT and other
GoU entities are following up on this issue to
mitigate or reduce the risk.
9,6 MW
INSTALLED
46 GWh
p/year
GET FiT UGANDA | ANNUAL REPORT 2016
PAGE 25
RWIMI
Run-of-river hydropower plant with a planned
installed capacity of 5.5 MW and estimated 27
GWh annual production, located in Kasese district.
Investment of USD 20.8M with USD 3.9M in GET
FiT commitments.
The project reached financial close and initiated
construction works in July 2015, and expected
commercial operations date is Q3 2017. The
power evacuation line is already completed,
which is encouraging. However, the developer
has encountered challenging conditions during
the construction of the dam. A main contributor
in this regard has been unusual flooding into
the dry season. Moreover, the excavation of the
waterway has proven to be more time-consuming
than foreseen.
5.5 MW
INSTALLED
27 GWh
P/YEAR
NYAMWAMBA
Run-of-river hydropower plant with a planned
installed capacity of 9.2 MW and estimated
39 GWh annual production, located in Kasese
district. Investment of USD 26.8M with USD 5.8M
in GET FiT commitments. The project started
construction in Q4 2015, and the expected
commercial operation date is Q1 2018. While
construction start was originally planned for June
2014, the project experienced significant delays
due to flooding, which damaged critical access
infrastructure (road and bridge) and required
redesign of the scheme. Nyamwamba will require
a 17 km dedicated medium voltage line for
interconnection to the national grid, which REA
is committed to construct. In 2016 Nyamwamba
has progressed well. Construction of weir, intake
and headrace pipe is on schedule. Despite a
challenging river with rapid floods and rough
sediment transport, progress on the weir site is
notable.
9,2 MW
INSTALLED
39 GWh
P/YEAR
PAGE 26
GOU and KFW | Multiconsult
LUBILIA
Run-of-river hydropower plant with a planned
installed capacity of 5.4 MW and expected 25
GWh annual production, located in Kasese district.
Investment of USD 18.7M with USD 3.2M in GET
FiT commitments. The developer commenced
construction in March 2016 after clearing the
final environmental and social CPs. Expected
commercial operation date is Q4 2017. Works at
the forebay, intake weir and sedimentation basin
are progressing well. Excavation of the headrace
canal and penstock have both commenced in
a steep and challenging terrain. In terms of
interconnection, Lubilia is ideally placed only 3.2
km from the existing grid, and grid interconnection
is not likely to represent any challenges.
5.4 MW
INSTALLED
25 GWh
p/year
WAKI
Run-of-river hydropower plant with a planned
installed capacity of 4.8 MW and estimated 25 GWh
annual production located in Hoima and Bulisa
District, Western Uganda. Investment of USD
18.1M with USD 3.6M in GET FiT commitments.
The developer launched construction activities in
May 2015 and saw rapid progress on the access
roads and headrace canal. However in 2016,
the progress was hampered due to difficulties
reaching financial close. Financing is now secured
and we expect the project to be largely back on
track towards a late 2017 commissioning.
4.8 MW
INSTALLED
25 GWh
p/year
GET FiT UGANDA | ANNUAL REPORT 2016
PAGE 27
SITI II
Run-of-river hydropower plant with a planned
installed capacity of 16 MW and estimated 72
GWh annual production located in Bukwo District,
Eastern Uganda. Investment of USD 33M with USD
10.2M in GET FiT commitments.
The project started construction in August 2016,
with expected commercial operation date in Q3
2018. In the long term, full and adequate power
evacuation for Siti II depends on the progress
of the Mbale–Bulambuli 132 kV transmission
project. Implementation of the latter will not
be possible prior to commissioning of the HPP,
hence an interim medium voltage solution is
being constructed by REA to enable the timely
interconnection of the plant (see section 4.2 for
details ).
16 MW
INSTALLED
72 GWh
P/YEAR
SINDILA
Run-of-river hydropower plant with a planned
installed capacity of 5 MW and 27 GWh expected
annual production located in Bundibugyo district.
Investment of USD 17M with USD 3.3M in GET FiT
commitments.
Sindila was the last project to be selected from
the second Request for Proposals (RFP) round,
after a re-appraisal of the project was conducted
in October 2014. Construction started in early
2017 and expected commercial operation date
is in Q3 2018. Reinforcement of the 87 km long
33 kV line from Bundibugyo to Fort Portal is
required to ensure viable power evacuation from
the power plant and is financed under the GET FiT
interconnection support component, which will
also benefit the GET FiT approved and neighboring
project Ndugutu HPP.
5 MW
INSTALLED
27 GWh
P/YEAR
PAGE 28
GOU and KFW | Multiconsult
KYAMBURA
Run-of-river HPP with a planned installed capacity
of 7.6 MW and 36.7 GWh in annual production.
The project is located in the Rubirizi district.
Investment of USD 24M with USD 5.4M in GET FiT
commitments.
Approved for GET FiT support after RFP 3 in
November 2015. Preliminary construction
commenced in early 2017, with expected COD in
Q4 2018. The project is currently implementing
a major design change. The previous headrace
tunnel is being replaced by a headrace canal.
Importantly, this significantly reduces project
costs and construction time for the project.
However, continued GET FiT support is currently
uncertain due to a number of challenging
conditions that need to be met in a short time
frame.
7,6 MW
INSTALLED
36,7 GWh
p/year
TORORO SOLAR
Ground mounted solar PV power plant, located in
Tororo district, with a planned peak capacity of 10
MWp and an average annual energy production of
16.7 GWh.
Investment of USD 20M with USD 8.6M in GET
FiT Commitments. After experiencing various
delays throughout 2016, the project was able to
break ground in late 2016. The developer expects
to reach COD in Q3 2017. To achieve the general
ambition of a short construction period, it is
particularly important to proactively address any
unforeseen issues along the way. The GET FIT
supervision team will make efforts to maintain
flexibility in its supervision and support to help
the developer achieve this goal.
10 MWP
INSTALLED
16,7 GWh
P/YEAR
GET FiT UGANDA | ANNUAL REPORT 2016
PAGE 29
KIKIGATI
Run-of-river hydropower plant with a planned
installed capacity of 16 MW and 115 GWh annual
production located in Isingiro district, Southern
Uganda on the border to Tanzania. Investment
of USD 51.1M with USD 12.3M in GFPPM
commitments.
After two years standstill, the Governments
of Tanzania and Uganda signed a bilateral
agreement for implementation of the project
in 2015. This enabled the new owner, Berkeley
Energy, to resume preparatory work. However, due
to continued cross-border issues and difficulties
in implementing bilateral agreements, the
project has struggled extensively to achieve
financial close and construction start. While a
few outstanding issues remain, progress on cross-
border issues has been notable and the project
now expects to commence construction within
the first half of 2017.
16 MW
INSTALLED
115 GWh
P/YEAR
Projects
Under Development
2.4
NYAMAGASANI I
Run-of-river HPP with a planned installed capacity
of 15 MW and 64 GWh in annual production.
The project is located in the Kasese district.
Investment of USD 36.7M with USD 9.4M in
GFPPM commitments. Approved for GET FiT
support after RFP 3 in June 2015. DFA signed in
2016. Construction start is expected within Q1
2017.
15 MW
INSTALLED
64 GWh
P/YEAR
NYAMAGASANI II
Run-of-river HPP with a planned installed
capacity of 5 MW and 25.5 GWh in annual
production. The project is located in the Kasese
district. Investment of USD 19.8M with USD 3.7M
in GFPPM commitments.
Approved for GET FiT support after RFP 3 in June
2015. DFA signed in 2016. Construction start
is expected within Q1 2017. The Nyamagasani
projects both benefit from the GET FiT
interconnection support component, which
includes the provision new 33 kV lines and the
reinforcement of the existing local networks to
fully evacuate power from the plants.
5 MW
INSTALLED
25,5 GWh
p/year
PAGE 30
GOU and KFW | Multiconsult
NDUGUTU
Run-of-river HPP with a planned installed capacity
of 4.8 MW and 22 GWh in annual production. The
project is located in the Bundibugyo district.
Investment of USD 15M with USD 3.2M in GFPPM
commitments.
Approved for GET FiT support after RFP 3 in
June 2015. DFA signed in 2016. Construction
start is expected in mid-2017, with planned
commissioning in Q4 2018. The project will
benefit from the already initiated works on access
roads etc. from its neighboring project Sindila.
The developer is currently considering a design
change, specifically moving the intake location
and headrace to create more head and thus
increase the power output of the plant. However,
time is running out for major changes like this,
and the decision to actually proceed with the
change is currently being discussed.
4,8 MWP
INSTALLED
22 GWh
P/YEAR
Expected
Portfolio Output
2.4
O
verall, the GET FiT portfolio stands at a
total of 17 projects, yielding a planned
generation capacity of 157 MW and 769
GWh of annual energy production. Three
technologies are supported, including hydro (14
projects), solar PV (2 projects) and one bagasse-
based power plant. The overall move from
development to construction stages has taken
the portfolio to a higher level of certainty, and
increased the confidence in achieving Program
targets to a large extent. The figures below
provide an overview of the portfolio, and illustrate
the expected build-up of installed capacity and
annual generation from the portfolio.
Figure 1: GET FiT portfolio build up and original targets
GET FiT UGANDA | ANNUAL REPORT 2016
PAGE 31
The gure below illustrates the indicative portfolio
build-up with time. The majority of approved
projects are expected to reach commercial
operation by end of 2018. It should be noted that
the projection is subject to the uncertainty of one
or more projects failing to reach nancial close
and dropping out of the portfolio.
Figure 2 GET FiT implementation timeline
PAGE 32
GOU and KFW | Multiconsult
Re-appraisal
of Projects
2.5
A
s the GET FiT Program is now moving
towards the end of its window of
opportunity, certain projects are facing
pressure to meet deadlines, reaching
financial close and commencing construction.
There is a risk that one or several projects within
the existing portfolio may lose the support of
the GET FiT Program. In order to enable potential
swift replacement of any project(s) dropping out
of the portfolio, a process was initiated by ERA
and KfW to re-appraise three projects that had
previously applied, but not been granted GET FiT
support.
The re-appraisals are ongoing, and will critically
review and determine whether these projects
have seen sufficient progress against the scoring
criteria to be accepted. Upon approval of any of
these projects, they would be included as reserve
projects, with the potential to obtain partly or full
GET FiT support in the event of projects dropping
out of the current portfolio.
GET FiT UGANDA | ANNUAL REPORT 2016
PAGE 33
MANAGEMENT OF
ENVIRONMENTAL & SOCIAL
PERFORMANCE
3
Environmental
and social benchmark
3.1
Sound management of environmental and
social risks protects the environment,
safeguards project-affected people and
workers, secures a social license to operate
and guards against a variety of risks during
construction and operation.
P
rojects receiving GET FiT support
are therefore expected to comply
with Ugandan regulations as well as
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 financing
institutions and private investors, which also
make these a convenient common reference point
in multi-donor funded initiatives like GET FiT. It is
important to note that the Ugandan regulations
and the IFC PS overlap greatly, though there are
also some important differences. Examples of
differences include the IFC PS requirement of
compensation for loss of assets based on full
replacement cost (market value + transaction
costs) rather than Uganda’s requirement of using
depreciated value, and the IFC PS requirement
for biodiversity offsets when a project impacts a
protected area such as a national park (no such
requirement in current Ugandan legislation).
Example from Lubilia small
Hydropower Project
The Lubilia Small Hydropower Project in Western
Uganda, developed by DI Frontier Market Energy
and Carbon Fund, started construction in February
2016. Like in many projects, project-affected
people (PAPs) have a strong preference for the
immediate and tangible cash compensation
rather than in-kind compensation. Despite the
risks of cash compensation and efforts by the
Developer to encourage at least partly accepting
compensation in-kind, Mr. Simon Nyamusule (35
years old) was one of the PAPs who repeatedly
insisted on receiving the full compensation in
cash rather than in-kind, even though the project
meant his house had to be taken down and this
left his family in a vulnerable position.
Instead of acquiring a new house, Simon lent the
compensation money to his brother to do business
in neighbouring DR Congo. Unfortunately, the
money was lost. Being unable to acquire a new
house for his family, he came back to the Project
to request for assistance. Following discussions
over considerable time, the Project agreed to
Challenges in compensation
PAGE 34
GOU and KFW | Multiconsult
partly support Simon in acquiring half an acre of
land, assisted in securing a job with the Project
and to save part of his salary to pay for land, plant
maize with support from the Project’s livelihood
restoration activities and harvest and sell maize
with some profit. The Developer continues to
follow up closely and provide non-cash support
to Simon, so that he can sustain his family and
gradually hopefully complete the construction of
his house.
GET FiT encourages developers to provide
additional incentives for PAPs to choose in-kind
rather than cash compensation, acknowledging
that developers cannot force PAPs to accept in-
kind compensation. When PAPs make decisions
that later prove unfortunate, a responsible
developer goes an extra mile to assist people to
help themselves, like in this case.
Simon Nyamusule (left) with the Developer’s Community Liaison
Ofcer, Mr. Jeremiah Kimeze, in front of the productive maize eld.
Example from Rwimi Small
Hydropower Project
The Rwimi Small Hydropower Project acquired
land from more than 90 households. Mr. Semu
Mumbere, supporting a family of eight persons,
lost a large share of his land and was therefore
categorised as a vulnerable PAP. Semu received
a compensation of 2.8 million Ugandan shillings
(about USD 1,000 at the time), a very large amount
of cash by local standards, but money that Semu
carefully placed in family priority areas: ‘During
compensation for my land, I received 2.8 million
which helped me to construct a permanent good
house and with the balance I attained another
land which is about 1 acre with good fertile soils’.
As a vulnerable PAP Semu received priority in
terms of employment, and he has been working
with the Project since the construction start in
2015. Semu has been a hard-working employee,
and his efforts were recognized and resulted in
a daily salary increment from UGX 7,000 to UGX
10,000. He has also received seeds for three
seasons, saplings for two seasons, goats and
poultry as part of the livelihood restoration plan.
Through his salary and the Project’s assistance,
Semu Mumbere has been able to increase his
livestock gradually to 10 goats and even a cow.
In addition, he has been able to pay his children’s
school fees on time and managed to put small
solar panels on his house. His hard work,
combined with trainings on intensive agriculture,
poultry practice, goat rearing, and domestic cash
flow management, has placed him and his family
in an improved situation despite the potential
vulnerability induced by the Project’s land take.
GET FiT continues to encourage project
developers to prioritise vulnerable PAPs in
livelihood restoration, to identify their particular
needs and priorities and to use this information
in tailoring livelihood restoration to individual
From vulnerability to livelihood improvement
GET FiT UGANDA | ANNUAL REPORT 2016
PAGE 35
PAPs. Developers are also required to follow up and monitor vulnerable PAPs as part of efforts to
ensure that the livelihoods of vulnerable PAPs are as a minimum restored, preferably improved.
Community development efforts
Example from Siti 1 Small
Hydropower Project
The Siti 1 project on the northern side of Mount
Elgon in Eastern Uganda is one of several
hydropower projects with a land take that
impacts more than 100 households. Beyond the
livelihood restoration for those directly affected
by the Project, the developer also seeks to invest
in long-term community development through
building skills and empowering project-affected
people as well as other community members. One
of the activities is training of mostly women as
birth attendants.
The training of 35 people built their capacity,
which also came with a considerable sense of
pride in their new skills, and provides a source of
income for their families. These skills also secure
important benefits through safer births for the
remote community that has limited access to
health facilities.
A group of future birth attendants in gear provided by the Project, ready for
a training session.
Mr. Semu Mumbere at work for the
Rwimi Small Hydropower Project.
Semu’s wife picking up the poultry
(1 cockerel, 2 hens) provided by
the Project as part of livelihood
restoration
PAGE 36
GOU and KFW | Multiconsult
GET FiT follow-up and
support
3.2
A
s highlighted in previous GET FiT Annual
Reports, the capacity of developers to
manage environmental and social risks,
including health and safety, has been
lower than expected. Weak capacity was reflected
in the low environmental and social scores
during appraisals of applications for the GET FiT
premium payment mechanism. An anonymous
survey among developers in 2015 also confirmed
that few of the developers had experience from
implementing projects in line with the IFC
performance standards prior to GET FiT.
Consequently, GET FiT has spent considerable
time advising developers on E&S issues. Support
from GET FiT also included environmental and
social workshops for small hydropower, biomass
and solar developers and their consultants in
June 2014 and October 2015. In 2016, developers
continued to express a high demand for GET FiT
engagement on management of environmental
and social risks. Additional resources have been
provided by KfW, and GET FiT in cooperation
with ERA continued to support developers in this
respect.
With more projects moving into construction,
much of the follow-up in 2016 was in the form
of supervision visits to construction sites. The
GET FiT Implementation Consultant carries
out a semi-annual one-day supervision visit to
each project under construction to monitor and
advise on environmental and social as well as
technical issues. Action points are identified in
each supervision visit. One of the projects with
particularly weak environmental and social
management systems is visited quarterly. The
supervision visits continue to prove useful and
a necessary part of managing environmental and
social risks. A total of 18 project supervision visits
to ten projects were made in 2016.
Performance–improvements
and remaining challenges
3.3
O
verall, the environmental and social
performance improved in 2016.
However, progress is uneven between
projects, and this appears to be largely
related to variation in the level of internal
environmental and social capacity with the
developers as well as the degree to which the
environmental and social standards are firmly
embedded in developers’ strategies and seen as
a priority at senior management level. During
GET FiT, some developers have made impressive
improvements in their capacity to manage
a range of environmental and social issues.
As a consequence of GET FiT, there is now a
considerably higher degree of compliance with
Ugandan and international standards than would
otherwise have been observed.
Prior to GET FiT, most developers had not
gone through full project cycles from project
development to operation following international
performance standards. Moving from planning
to construction, developers now experience
new challenges in practical implementation of
environmental and social measures, including
GET FiT UGANDA | ANNUAL REPORT 2016
PAGE 37
ensuring contractors understand and adhere to
the developers’ management plans and standards.
Continuous improvements are required. GET
FiT believes that once developers have gone
through the steps from project development to
operation, they will have improved planning and
implementation capacities considerably.
Unfortunately, 2016 saw the first fatality reported
among construction workers for a GET FiT
supported project in a traffic related accident. The
developer and contractor in question are working
to support the family who lost the husband and
father. During a supervision visit in 2016, GET FiT
noted systematic weaknesses and unacceptable
safety measures on this construction site. GET
FiT therefore requested that certain high risk
construction activities were suspended until
appropriate safety measures were put in place,
despite the critical nature of these activities for
the project construction timeline. GET FiT further
requested an independent audit of the Contractor’s
site practices to verify that improvements had
been implemented. Following this audit, an
unannounced inspection was carried out by GET
FiT to check that improvements continued to be
implemented. We were content to note that this
inspection showed great improvements.
The GET FiT Investment Committee defined more
than 50 environmental and social conditions
precedent (CPs) across the three RfPs. This
large number of CPs reflects the overall low
environmental and social capability of project
developers and their consultants, particularly
gaps in 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). Fourteen CPs across
seven projects were cleared in 2016. Cumulatively,
about 70 % of the environmental and social CPs
have now been cleared. Four projects still need to
clear CPs prior to construction start.
Based on environmental and social grounds, one
approved project had its support revoked by the
GET FiT Steering Committee in 2015. No support
was revoked in 2016. There are, however, projects
that need to improve their environmental and
social performance to achieve COD in compliance
with standards and hence be approved for the first
disbursement of the GET FiT premium payment.
For more information, see Figure 7 on page 37 in the GET FiT Annual Report 2015.
For more information, see text box on page 38 in the GET FiT Annual Report 2015.
PAGE 38
GOU and KFW | Multiconsult
R
elatively abundant rainfall in Uganda not
only provides the basis for hydropower
production but also widespread rainfed
subsistence agriculture and a high
population density with small land plots in most
of the project areas. Consequently, displacement
of people is one of the main issues that projects
need to carefully manage to minimise impacts
on local people and to reduce project risks
associated with sensitive issues regarding land,
compensation and livelihood restoration. Some
experiences with handling of displacement in
the small hydropower projects are summarised
below but is limited to physical and economic
displacement and not associated issues such
as potential food insecurity, landlessness and
marginalisation. As will be seen below, there is
great variation in the degree to which developers
have been able to avoid displacement.
Highly variable extent of
displacement
There are two forms of displacement. Physical
displacement refers to relocation or loss of shelter.
Economic displacement refers to loss of assets
or access to assets that leads to loss of income
sources or other means of livelihood. Project-
related land acquisition as well as restrictions on
land use can cause displacement.
Based on data available at the time of GET FiT
project approvals, the small hydropower projects
were estimated to cause physical displacement of
about 150 households and economic displacement
of about 1,400 households. It is important to
note that most of the economically displaced
households only lost a small proportion of their
land.
GET FiT has observed great variation in the
degree to which projects have managed to avoid
and minimise land take and displacement. There
is a trend of more displacement when land take
grows (see Figure 3 below). There is an exception
to these trends as some projects have very limited
or no displacement despite a relatively large land
take. The latter group of projects are located
in drier areas without significant agricultural
production, with very low population density and
therefore a limited incentive to minimise land
take. About 87% of the projects (13 out of 15)
have a land take below 1 hectare per GWh of
estimated annual power production. Of the two
projects with a larger land take than 1 ha/GWh,
one has a reservoir with considerable inundation
and the other is in a dry area without agriculture
and no strong incentive to minimise land take.
A group of four projects (27%) cause very limited
displacement (physical and economic), less than
0.5 households per GWh of estimated annual power
A closer look at displacement for
hydropower projects
GET FiT Academic Corner’
GET FiT UGANDA | ANNUAL REPORT 2016
PAGE 39
production. The rest of the projects impact more
than 2.3 households per GWh. The main difference
between these two groups of projects is level of
rainfall in the project areas and consequently
extent of agriculture and population density.
Within the second group of projects (those in areas
with considerable rainfed agriculture), there is
large variation in impact levels. Here, the ability
of developers to adjust project design to avoid
displacement is an important factor influencing
levels of displacement and associated risks.
Figure 3: Land take (in hectare) per GWh (estimated annual power production) plotted against total number of displaced households
(physical and economic displacement) per GWh for 15 small hydropower projects approved for GET FiT support.
3
If we split total number of displaced households
into physical and economic displacement,
Figure 4 shows a general trend of physical
displacement increasing with the extent of
economic displacement. This figure also shows
two main groups of projects in terms of physical
3
Data are taken from studies done prior to GET FiT approval. For some projects, the extent of land take and displacement
have increased during detailed design and construction. These increases will be reported on later.
PAGE 40
GOU and KFW | Multiconsult
displacement. Nine projects (60 %) have avoided
all or virtually all physical displacement, four
of which have also fully or nearly fully avoided
economic displacement. These projects are in
areas generally not suited for agriculture and with
very few people, typically further downstream in
catchments where climatic conditions are drier.
The other five of the nine projects in this group
have managed fully or largely to avoid physical
displacement even if located in areas with rainfed
agriculture and higher population density. On the
other side, a group of four projects causes the
highest levels of physical displacement, all have
recorded more than 0.74 households physically
displaced per GWh of estimated annual power
production.
Figure 4: Number of physically displaced households per GWh (estimated annual power production) plotted against number of economically dis-
placed households per GWh for 15 small hydropower projects approved for GET FiT support.
Some GET FiT experiences from
engagement with developers
The above shows the need for GET FiT’s to focus
on management of displacement. Project devel-
opers were expected show that they had avoided
displacement as far as possible, and when avoid-
ance was not possible, minimise displacement by
exploring alternative project designs. The degree
of success in avoidance varied considerably, partly
due to the developers’ planning capacities and
partly due to the topographical and climatic con-
ditions at project sites.
For those displaced, the livelihoods and stand-
ards of living should as a minimum be restored,
preferably improved. Appropriate compensation
and livelihood restoration plans were therefore
essential and a focal issue for GET FiT. Develop-
ers overwhelmingly relied on cash compensation,
which was the preference over land-for-land and
house-for-house compensation among communi-
GET FiT UGANDA | ANNUAL REPORT 2016
PAGE 41
ties, despite the risks in terms of long-term live-
lihood security when cash compensation is used.
Cash is also a simple form of compensation for
the developers, at least in the short-term. GET FiT
requested developers to do more to raise aware-
ness and incentivise compensation in-kind rather
than cash, particularly for vulnerable persons, and
to monitor whether livelihoods are restored. The
lack of developers’ experience from long-term en-
gagement with project-affected persons, particu-
larly vulnerable people, contributed to the bias
towards cash compensation.
Categorising project-affected people and clear-
ly distinguishing between those affected only
marginally on the one side (most PAPs) and
those who are substantially affected and left in a
vulnerable position on the other (few PAPs), was
another challenge. For the rst group, cash com-
pensation may not jeopardise living standards as
most of the livelihood base remain unaffected.
The second group is potentially much more vul-
nerable as they may have lost a large proportion
of their land, remain with land of poor quality or
their ability to sustain themselves has otherwise
been reduced. GET FiT requested most developers
to revise resettlement action plans and livelihood
restoration plans to better differentiate liveli-
hood restoration approaches according to PAPs’
vulnerability.
Some developers make commendable efforts to
work with local civil society organisations (CSOs)
that have experience in community work as part
of livelihood restoration. Experiences are mixed
as abilities of the CSOs have proved variable,
underlining the importance of good selection
processes for partners in livelihood restoration.
Implementation of resettlement and livelihood
restoration plans is ongoing and the degree to
which projects manage to restore, or improve,
livelihoods in a sustainable manner will be re-
ported on later.
PAGE 42
GOU and KFW | Multiconsult
E
RA held a two day GET FiT Forum on 30 31
May 2016, funded by the GET FiT TA Facility.
The first day comprised a public multi-
stakeholder event aimed at addressing
the broader topic of private sector investment and
small-scale RE project development in Uganda.
The event also served as a publicity opportunity
to communicate the achievements of the GET
FiT program as well as to review lessons learnt
from the program´s implementation phase. The
event provided a platform to discuss the future
of private sector investment in the Ugandan RE
sector, and the future role of public, private and
commercial investors and financing institutions.
The public event closed with a celebratory dinner
for key stakeholders and GET FiT representatives
hosted by ERA. The ERA launched its new corporate
identity during the dinner.
The second day of the Forum consisted of
technical level workshops for ERA staff. The
workshops were prepared and administered by
Multiconsult in cooperation with the Investment
Committee members (Anton Eberhard, Vincent
Kasangaki, Sylvia Kreibiehl and Jim Cohen).
The objective of the workshops was to share
experience from project appraisal and supervision
through interaction with the experts of the GET
FiT Investment Committee and Implementation
Consultant. Through various technical sessions,
key experiences, lessons learned and insights
of the international experts were shared with
the ERA team. Important inter-disciplinary
dependencies between environmental and social,
technical and economic aspects were discussed
during the sessions.
OTHER ACTIVITIES
AND ACHIEVEMENTS
4
GET FiT Forum 2016
4.1
Panel discussion at the GET FiT Forum (Photo: GET FiT)
GET FiT UGANDA | ANNUAL REPORT 2016
PAGE 43
Environmental & Social
A joint session on management of environmental
and social impacts and risks covered three
main areas. Firstly, the overall appraisal and
scoring frameworks applied in GET FiT were
summarised. Secondly, the main appraisal and
scoring elements and issues were presented.
Finally, some lessons and experiences from the
appraisals and construction supervision visits so
far were highlighted. A break-out session with
ERA environmental and social staff went into
further details on management of environmental
and social risks.
Technical
The procedures and lessons learnt from technical
appraisals of GET FiT applicant projects were
presented briefly in a joint session for all
participants. More detailed discussion between
technical ERA staff and the Implementation
Consultant were held in a break-out session. It
was discussed how ERA and developers can build
on lessons learnt from GET FiT (in particular
with regards to hydrology assessment and plant
optimisation), to ensure efficient implementation
of RE projects going forward.
Economic & financial
The session on economic and financial appraisals
was carried out with ERA staff, but a few donors
and members of the Investment Committee
attended as well. The session covered three main
areas. Firstly, the overall appraisal and scoring
frameworks applied in GET FiT were summarized,
as were the results and implications for the
applicant projects under RFP2 and 3. Secondly,
the specific relevance and points of emphasis for
ERA, as the regulator, were discussed in detail.
Thirdly, the specific nature and implications
of limited-recourse project finance as applied
in most GET FiT projects was presented and
discussed. Throughout the session, project
fundamentals (e.g. capex/MW, plant factors, key
risk factors) were emphasized and the influence
on financial viability and bankability were
addressed. Investment Committee members
participated actively in the discussion, providing
practical insights and suggestions. The session
was rounded off by a group case-study regarding
one of the applicant projects from RFP 3, and a
final round-the-table comment period regarding
key takeaways for ERA from the GET FiT financial
and economic appraisal approach.
PAGE 44
GOU and KFW | Multiconsult
T
he adequate and timely interconnection
of GET FiT projects to ensure power
evacuation remains as a key risk for
several projects and currently represents
the single most considerable risk to achievement
of GET FiT targets. Moreover, it to an increasing
degree represents a risk to the Government in
form of potential deemed energy
4
obligations.
In 2014/15, development partners agreed to
provide additional financial support to strengthen
critical grid infrastructure and regulatory capacity
for effective evacuation of power generated by
the GET FiT projects.
Investments implemented
under GET FiT governance
As part of their overall commitment to the
GET FiT Program, UK DFID has contributed a
GBP 14.7 million grant to address urgent grid
investments, combined with comprehensive
technical assistance to ERA. All the infrastructure
investments are under full implementation and
currently at procurement stages. Construction for
these interventions will commence at full scale
in 2017. The projects are summarized in the table
below.
Grid interconnection
4.2
33 kV Upgrades in Western
Uganda
GoU through KfW has received funding from UK’s DFID
for the upgrade of selected 33 kV lines necessary for
the grid integration of four GET FiT projects in West-
ern Uganda, as identied by the power sector joint task
force. The REA, through KfW, has procured the services
of Consultant Sweco in 2016 to design and supervise
the implementation of the lines. Sweco has kicked off
the project and is currently undertaking technical and
environmental surveys towards the design and con-
struction of the lines. The upgrades are expected to be
ready in 2018.
Opuyo Substation
The Opuyo substation was identied as a key sub-
station for the development of the vast solar power
Table 2 Critical grid infrastructure investments and TA implemented under GET FiT governance
4
Deemed energy is energy which could have been produced at a generating facility but is not due to insufcient grid ca-
pacity. This represents an income loss to the power plant owner, which must be compensated by GoU.
GET FiT UGANDA | ANNUAL REPORT 2016
PAGE 45
potential in the East, including the just commissioned
Soroti solar project. Additionally, the substation has re-
liability constraints due to the fact that it has only one
transformer. Upgrades are required to improve the grid
stability and security by providing transmission infra-
structure with adequate exibility. GoU through KfW
has received funding from UK’s DFID to upgrade the
substation. A tender agent has been procured by UETCL
with support from KfW, a supervision consultant has
been selected and procurement is currently ongoing
for the EPC contractor.
TA Support to ERA
The TA support to ERA was aimed at building the ca-
pacity of the regulator to effectively implement in-
terconnection agreements for new small renewable
energy projects, and to monitor the compliance of li-
censees with regulatory requirements. The support has
involved two main components, both initiated in 2016.
The rst was the development of an Interconnection
and Wheeling Agreement, which was awarded to In-
tec GOPA in June 2016. This TA is aimed at addressing
the technical requirements for the interconnection of
small-scale generators, which are insufciently cov-
ered by the existing grid code, and to develop a wheel-
ing agreement for power evacuation through interme-
diate networks to the transmission grid. The Consultant
held a consultative workshop in January 2017 and the
nal deliverables are expected end of February 2017.
The second TA component targeted the Optimization
of Compliance Monitoring of Distribution and Trans-
mission Licensees and Regulatory Capacity Building.
The overall objectives for this TA were to equip ERA
staff with the procedural, technical, economic and envi-
ronmental competence to perform its mandate as reg-
ulator of the transmission and distribution sub-sector
in line with international best practice and to establish
licensing and performance monitoring processes for all
present and future transmission and distribution licen-
sees. The consultancy was awarded to the joint venture
between Azorom, Fichtner and Kaizen Africa in Novem-
ber 2016. The consultant held a kick-off meeting in De-
cember 2016 and the assignment is well underway.
In an effort to maintain the favorable Renewable En-
ergy Investment climate in Uganda, ERA with support
from the GET FIT TA Facility revised the Renewable En-
ergy Feed in Tariffs (REFiT) in July 2016. A main target
was to maintain the nancial viability of future projects
being developed without the support of GET FiT, and
ERA approved the new tariffs for the period 2016- 18.
The tariff review was conducted in cooperation with
Frankfurt School, and included hands-on training for
ERA staff within establishment of benchmark energy
generation costs and tariff modeling. Following the
tariff review, cost reective REFiTs were established
for most technologies, including small hydropower
and bagasse. For solar PV, no reasonable tariff could be
determined taking dynamic panel prices into account.
Hence tendering will be adopted as the main approach
for solar PV development, to achieve competitive tar-
iffs.
Finally, ERA and GET FiT are currently developing a
new technical assistance component to implement a
modern regulatory IT system for ERA. This has been
identied by the Authority as a key need in adopting
and institutionalizing their increasingly comprehen-
sive regulatory framework and competence base, and
to make their general operations more effective and
efcient.
Stakeholder workshop by Intec GOPA on the Interconnection and Wheeling Agreement TA
at Golf Course hotel, Kampala (source: GET FiT)
PAGE 46
GOU and KFW | Multiconsult
Other key grid investments sup-
ported by development partners
In addition to the above listed interventions, the World
Bank and the Government of Germany have committed
to provide nancing towards implementation of criti-
cal grid infrastructure (subject to positive appraisal), as
presented in the table below.
A brief description and status update on implementa-
tion of these interventions is provided below.
Nkenda Substation
The Nkenda substation in Kasese is pivotal to the
electrication of Western Uganda and for the power
evacuation of existing and pipeline small hydro power
projects in the area. Six GET FiT projects with a cumu-
lative generating capacity of 48 MW will be evacuated
through Nkenda substation. Three of the projects are
already under construction, with one expected to reach
COD in mid-2017. With a current capacity of 40 MVA,
the substation will need to be upgraded to cater for the
new and pipeline projects. The World Bank has secured
funding for the required upgrade of the substation
from 40 to 120 MVA for this purpose.
Based on the planned commissioning of GET FiT pro-
jects, implementation of the Nkenda substation rein-
forcement must be maintained as a key priority in order
to minimize deemed energy obligations. The latest up-
dates are as follows:
The selection of the supervision consultant by UETCL is
complete, pending approval of the World Bank. UETCL
implementation timeline foresees 9 months procure-
ment and 18 months construction. Realistic best case is
mid-2019, so deemed energy risk remains high.
Mbale – Bulambuli Transmission
Project
The new 132 kV Mbale Bulambuli transmission line
will be required for the efcient evacuation of the Siti
1 and 2 HPPs (23 MW) and other pipeline projects in
the area. KfW through EU ITF has secured funding for
the feasibility study of the line and UETCL has procured
a consultant to undertake the study. Given the long
lead times for the transmission line construction, the
government, through ERA and REA, approved the im-
plementation of an interim 33 kV solution to enable
timely evacuation of Siti 2, which is currently under
construction. However, the interim solution does not
allow for full power evacuation from the Siti projects,
and therefore is only valid for a limited period of time.
Once the validity of this solution expires, the 132 kV
line must be in place to (again) avoid future deemed
energy obligations on GoU. As the study for the 132 kV
permanent solution is currently behind schedule, this
needs to be fast-tracked in order to avoid the latter.
Table 3 Critical grid infrastructure investments and TA implemented under GET FiT governance
GET FiT UGANDA | ANNUAL REPORT 2016
PAGE 47
The UETCL Nkenda Substation is a key component for adequate power evacuation of GET FiT hydropower
projects in Western Uganda. Photo: GET FiT
It should be noted that this report only mentions (do-
nor funded) investments directly related to evacuation
of GET FiT projects, but that several other critical in-
vestments in transmission infrastructure are ongoing.
For example, the ongoing construction of the 220 kV
transmission line from Nkenda to Hoima will be impor-
tant for the stable evacuation of projects in Kasese and
Hoima areas. Additionally, REA and Umeme will nance
and construct a number of 33kV lines to interconnect
GET FiT projects to the national grid.
Although comprehensive efforts are being made by
GoU and GET FiT development partners to fast-track
critical grid investments, the interventions are gener-
ally behind schedule with respect to planned commis-
sioning of the GET FiT portfolio. Continued efforts are
thus crucial to avoid further delays. More details on
how GET FiT addresses these challenges are provided
in Chapter 5 (Program Monitoring & Risk Management).
PAGE 48
GOU and KFW | Multiconsult
I
n 2014, a Partial Risk Guarantee (PRG) facility
in support of small scale renewable projects
in Uganda was approved by the World Bank
Group Executive Board. The PRG facility was
structured specifically to align with the existing
GET FiT systems used to implement, manage and
monitor the portfolio . The PRG facility comprised
three complimentary risk-mitigating components;
i. Facilitate the provision of short term liquidity
support to the benefit of UETCLs Power Purchase
Agreement obligations.
ii.Termination compensation for events of
governmental/utility default under the PPA / IA.
iii. Commercial debt guarantee.
Due to various reasons, GET FiT developers dis
not utilize the PRG facility. In some aspects, this
can be viewed as positive, indicating that the
investment climate (hereunder the regulatory,
technical and financial frameworks) of the
Ugandan power sector was sufficiently reliable
and stable for developers to manage without it.
Status of
the World Bank PRG Facility
4.3
I
n October 2015, an independent consultant
was contracted to carry out the first
performance review of GET FiT Uganda. Data
collection started during the last quarter of
2015 and the final performance review report
was submitted in May 2016. The full report is
available on the GET FiT website .
Evaluation
and Performance Review
4.4
GET FiT UGANDA | ANNUAL REPORT 2016
PAGE 49
FINANCIAL STATUS
5
Funding
commitments
5.1
T
he results-based nature of the GET FiT
Program is strongly dependent upon
predictable and credible commitments
from funders in order to prove successful.
Furthermore, it requires a certain degree of active
follow-up and flexibility in order to maintain a
healthy cash balance throughout the Program.
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, BMU) and the EU (through EU ITF).
To date, EUR 93.6 million has been committed to
the Program.
Table 4: Overall donor commitments to GET FiT. Net amounts are based on
funding disbursed to the Program thus far, projected exchange rates for
undisbursed funds and deduction of management fees
PAGE 50
GOU and KFW | Multiconsult
Foreign exchange
rate developments
5.2
F
oreign exchange rate developments
within the financial structure of the
Program reduced the overall budget
by approximately 13 % as of mid-2015.
Subsequently, a 1.5 million Euro budget buffer
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 for more
details on these issues.
A limited amount of undisbursed donor funds
remains at this stage, currently equivalent to
approximately 8% of the total GET FiT budget.
As the established buffer still leaves room
for a significant level of decline in the EUR/
GBP rate, the associated risk is not considered
particularly high. Nonetheless, the exchange rate
developments are monitored to enable measures
if needed.
Disbursement
projections
5.3
C
ommitted disbursements from the GET
FiT Program go towards four purposes: i)
payments to approved projects, with 50
% paid at commercial operation date and
50% paid in the form of results based support over
the first five years of operation, subject to actual
production, ii) payments to consultants under the
Technical Assistance Facility for ERA, iii) advisor
and consultants for the overall management and
monitoring of the Program, and iv) management
fee to KfW. Figure 5 illustrates the actual (up to
and including 2016) and expected distribution of
committed payments for the first years of the
Program. The projections are based on agreements
signed with developers thus far and status of
approved projects. It is noted that consultant
payments under the Technical Assistance
Facility are relatively high in early years, while
payments to project support are expected to take
up the lion’s share of the disbursements going
forward. Given the expected timing of the current
portfolio, the majority of commercial operation
date payments are expected in 2017-2018. Due to
the results-based disbursement during the first
five years of operation, the final payments from
GET FiT cannot be expected before 2023.
GET FiT UGANDA | ANNUAL REPORT 2016
PAGE 51
Figure 5. Projected annual payments (premium payments and consultants) under GET FiT. Projections are subject to uncertainty, mainly related to
individual project progress.
Figure 6 shows the relative shares of the various
cost components under the GET FiT Program,
based on current budget reservations. Overall, less
than 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 6. Approximately 90 % of commitments to GET FiT are projected to be disbursed as premium payments
PAGE 52
GOU and KFW | Multiconsult
PROGRAM MONITORING &
RISK MANAGEMENT
6
Program
monitoring
6.1
T
he GET FiT Monitoring and Evaluation
framework monitors the outputs, outcomes
and impacts generated by the Program
through one or several quantitative
indicators, which are collected from project
developers and key sector stakeholders semi-
annually. On this basis and through additional
data collection, bi-annual performance reviews
and evaluations are conducted by an independent
consultant. The objective of these reviews is to
critically and independently assess whether GET
FiT is meeting its output targets and milestones.
The first performance review was conducted in
2015/16, and the report is available at the GET
FiT website.
Table 5. GET FiT targeted outputs, outcomes and impact
GET FiT UGANDA | ANNUAL REPORT 2016
PAGE 53
In the early years of Program implementation
and with respect to portfolio capacity targets,
the monitoring reported mainly on expected
results based on the current portfolio status,
since results could not be attributed at early
development stages. With a range of projects
now at financial close and under construction, it
is encouraging to present considerable progress
on a range of indicators following a progressive
2016. The Logframe table below presents the
progress achieved over the past year . For
historical progress, refer to the previous GET FiT
annual reports.
Table 6. GET FiT targets and results – status after 2016
PAGE 54
GOU and KFW | Multiconsult
Risk
management
6.2
R
isk management is a continuous process
running through the lifetime of the
Program where risks are identified and
categorized, and measures introduced to
reduce or eliminate the risks. For more information
and detail on the risk matrix and methodology for
risk categorization, please refer to earlier GET FiT
reports.
The semi-annual monitoring undertaken by
GET FiT measures progress on key indicators
for the Program. Effectively, this contributes
to identifying and addressing risks as it helps
ERA, KfW, development partners and other
stakeholders to keep track of progress and see
periodical development. However, the day-to-
day management of the Program is the primary
source for risk identification and follow up. Close
communication with project developers and
power sector institutions and stakeholders, access
to key ERA staff via the GET FiT secretariat (which
is hosted by ERA themselves), active participation
in joint power sector planning by KfW and the
secretariat and engagement of development
partners are all key arenas that enable GET FiT to
continuously identify and assess risks to Program
implementation. This approach has proved vital
to achieve progress, as it has allowed the Program
to proactively address and mitigate risks across
a wide range of issues and areas of the sector.
These include both financial, legal and regulatory
risks. However, this close interaction and follow-
up has also contributed to increased management
costs by KfW and need for additional consultant
support.
In terms of the ability to follow up on project
specific technical, environmental and social risks,
the supervision of construction is obviously the
key tool, focusing on pro-active and flexible
support and follow up of all projects until they
reach commercial operations. These are key
lessons learnt that could be taken into account
for implementation of future GET FiT or similar
schemes
Key risks and ongoing GET FiT
efforts
Based on the overall developments throughout
2016, GET FiT risk management efforts are
currently largely focused within the following
main areas of concern:
Grid interconnection. The lack of progress on
grid infrastructure investments required for GET
FiT projects in 2016 has made the anticipated
interconnection risk even more critical. In
addition to the various investments supported
specifically by GET FiT and development partners
(see chapter 4.2), some GET FiT projects are also
affected by delayed implementation of smaller
scale grid investments. Although less costly, these
are equally crucial in terms of securing timely
and adequate interconnection. As a response to
these challenges, GET FiT has intensified efforts
to support GoU entities in fast-tracking and
coordinating required interventions. In late 2016,
ERA also requested support from the Program
to prepare an assessment of the overall deemed
energy obligations that would be incurred by
GoU in various scenarios of i) required timelines
for implementation of grid infrastructure and
ii) implementation of the GET FiT portfolio. The
assessment was conducted by Multiconsult (GET
FiT Implementation Consultant) and is aimed
at assisting ERA, MEMD and the transmission
and distribution companies in their continued
planning and coordination. Currently, some 80 MW
face risks regarding delayed grid interconnection.
Apart from jeopardizing the achievement of GET
FiT targets, this represents a huge challenge
for the energy sector and the Ugandan economy
since generated power has to be paid for without
capitalizing on its benefits in terms of social and
economic development.
Importantly, the ongoing TA to ERA (see chapter
4.2 for details) is progressing well and will
be instrumental in increasing ERAs capacity
GET FiT UGANDA | ANNUAL REPORT 2016
PAGE 55
to coordinate and monitor grid planning and
operation, which will also benefit the ability to
provide timely and adequate power evacuation
for GET FiT and future embedded RE generators
in Uganda.
Late construction start for remaining projects.
While most GET FiT projects are now financially
closed and/or under construction, time is running
out for the remaining projects under development
to fully commence construction activities.
Although it is understood that projects in general
are facing a range of challenges, including delays
caused by external factors, the pre-determined
time frame for Program implementation requires
that these projects break ground within early
2017. ERA and GET FiT are making necessary
efforts to help developers reach their required
deadlines on development milestones set by the
Program.
This is achieved primarily by providing flexible
support to the developers, e.g. on complying with
required technical, environmental and social
standards in order to proceed to construction.
While it is still anticipated that the remaining
projects in the portfolio will be implemented as
part of the Program, there is a significant risk that
some projects may not fulfil deadlines and hence
lose GET FiT support. In order to address this, a
re-appraisal of projects previously considered
for support is currently being undertaken. If
approved, these projects may replace potential
drop-outs and thus contribute to achieving the
capacity targets of the GET FiT project portfolio.
Environmental and social risk. It is uplifting
to note that the environmental and social
performance across the project portfolio has
improved noticeably in 2016. GET FiT continues
to provide substantial support to developers in
complying with international standards on issues
such as resettlement, compensation, health and
safety. This is vital not only to safeguard the
overall success and legacy of the Program, but
also to build developer capacity and to ensure
sustainable utilization of Uganda’s small-scale
RE potential for years to come. During GET FiT
implementation, some developers have made
impressive improvements in their capacity to
manage a range of environmental and social
issues. As a consequence of GET FiT, there is now
a considerably higher degree of compliance with
Ugandan and international standards than would
otherwise have been observed. Nonetheless, E&S
performance remains a key risk of the Program.
With now many projects under construction it
is vital that E&S standards are implemented
according to agreed plans. GET FiT has allocated
additional consultancy resources to ensure follow
up throughout the construction phase of each
project. These efforts are elaborated on in the
chapter on E&S performance.
Notably, GET FiT is also in the process of
allocating resources towards post-commissioning
supervision visits to all projects in the portfolio. For
environmental & social issues, several processes
and obligations of the developer in achieving
required standards require efforts beyond the
date of commercial operation. Hence, in order
to properly verify that plans are implemented
according to requirements and enable follow up
of deviations, conduction of post-COD supervision
visits are considered instrumental.
PAGE 56
GOU and KFW | Multiconsult
W
hereas 11 out of 17 approved projects
are now under full construction or
commissioned (Kakira and Soroti),
most of the remaining schemes
are likely to break ground within the first half
of 2017. Five hydropower projects and one
solar project are expected to reach commercial
operation this year, with most others following
in 2018. To ensure timely commissioning and
achievement of the time-bound GET FiT capacity
and production targets, a key focus of KfW and
the GET FiT Secretariat going forward will be to
assist the least advanced projects to fast-track
construction start. Efforts are also being made to
enable potential replacement of any project that
fails to meet critical deadlines.
Another key focus of the GET FiT team will be
the continued supervision of projects under
construction, to ensure compliance with
performance standards and other requirements.
Continued close communication with developers
and flexible support on technical, environmental
and social issues will be vital in avoiding delays
and ensuring quality of works.
To safeguard GET FiT targets and ensure viable
grid interconnection for all projects, KfW and
the GET FiT Secretariat will maintain pressure
on implementation of components within the
interconnection support scheme. This includes
the comprehensive infrastructure reinforcements
and TA support which require a high level of
coordination between all stakeholders. The GET
FiT team will support GoU entities and project
developers by facilitating joint planning and
continuous dialogue throughout the process.
Continued efforts in this regard will be critical
to avoid project delays and legal issues related
to grid interconnection for the range of projects.
The upcoming year will be a decisive one for
the Program. If important milestones such as
construction starts or financial close are missed,
some projects may have to be excluded from
the portfolio. These in turn could potentially
be replaced by previously rejected projects in
order to maintain capacity targets, depending on
outcome of re-appraisals.
Most of all, 2017 is the year in which
commissioning of the first hydropower projects
in the portfolio, as well as the second solar
plant, are planned. Adding to this, construction of
critical grid infrastructure for power evacuation
of GET FiT projects will commence, and ERA will
benefit from improved regulatory frameworks
and comprehensive capacity building in key areas
of its core business. Hence, most of all, this year
is likely to become a highly productive, fruitful
and exciting year for GET FiT stakeholders and
the Ugandan power sector.
OUTLOOK FOR 2017
7
GET FiT UGANDA | ANNUAL REPORT 2016
PAGE 57
B
ased on the success, experience
and lessons learnt thus far from the
implementation of GET FiT Uganda,
market assessments were carried out
in a range of countries to explore the potential
for further roll-out. As a result, the GET FiT
concept is currently at various stages of further
consideration or actual roll-out in several new
countries, with the most advanced at the moment
being Zambia.
Preparations for the GET FIT Zambia Program
have advanced well in 2016 and the German
Government committed full funding for Phase I
of the Program in December 2016. Most likely,
it will kick off by launching a Solar PV Auction
for a total capacity of 50 MW in May 2017. The
launch date is however still dependent on the
formal adoption of the REFiT Strategy by the
Zambian Cabinet which is expected in Q1 2017.
Preparations for small hydro and biomass (Phase
II of GET FiT Zambia) will start in 2017. The GET
FiT Zambia Programme comprises the following
elements: 1) GET FiT Premium (Grant Top-Up), 2)
Standardized Legal Documentation, 3) Support
for Permitting and Licensing, 4) Risk mitigation
(in cooperation with ATI) and 5) Support for Grid
Integration. A GET FiT Coordinator is permanently
based in Lusaka, who will be reinforced by a full
GET FiT Secretariat by Q3 2017 (Procurement to
start in Q1 2017).
The Interim Renewable Energy Feed-in Tariff
Program (Interim-REFiT) was introduced
in Namibia in 2015 and shall contribute to
mobilizing private investments into small-scale
energy projects with a total capacity of 70 MW.
However, the Namibian Interim REFiT Program
could only attract investments mainly into
solar energy, whereas investments into other
renewable energy resources did not materialize
as expected. Namibia is particularly interested
in supporting the utilization of encroacher-bush,
as more than one third of Namibia’s surface is
covered 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 utilization 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 program concept for
a GET FiT Program ‘bush-to-electricity’ in Namibia.
The study shall be financed by the Government of
Germany. It will be tendered and carried out in
the course of 2017.
A Renewable Energy Feed-in Tariff (REFiT) was
introduced in Mozambique in 2014. However,
private investments in renewable energy projects
have not materialized as expected. In order to
operationalize the REFiT, the Government of
Mozambique has requested KfW to undertake a
detailed design and implementation readiness
study to develop a programme concept for a GET
FiT Programme in Mozambique. The study will
be financed by the Government of the United
Kingdom and Northern Ireland. It will be tendered
and carried out in the course of 2017.
In December 2016 the German Government
indicated a commitment of up to 14.5 m EUR
(grant funds) for a Renewable Energy Development
Facility (REDF) in Vietnam. The REDF is jointly
prepared by the General Directorate of Energy
of the Ministry of Industry and Trade (MOIT) of
Vietnam and KfW and will be largely based on the
GET FiT model implemented in Uganda. The MOIT
intends to adopt a new feed-in-tariff policy for
wind and solar energy. Based on the new policy,
the Facility can provide additional financing and
help kick start private investments in wind and
possibly solar energy in Vietnam. KfW assists
MOIT in mobilizing additional funding from other
donors (including the EU).
The possibility of a GET FiT rollout in Ghana
under the new Government will be assessed
during 2017.
STATUS OF GET FIT ROLL-
OUT TO OTHER COUNTRIES
8
GOU and KFW | Multiconsult
GET FiT UGANDA | ANNUAL REPORT 2016
PAGE 59