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GET FiT Uganda - Annual Report 2018

SUPPORTED BY
2018
2018
This report including all content and
illustrations has been prepared by
In cooperation with:
GoU and KfW | Multiconsult
22
MESSAGE FROM MEMD
GET FiT Uganda | Annual Report 2018
3
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.”
4
GoU and KfW | Multiconsult
GET FiT Uganda | Annual Report 2018
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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.”
6
GoU and KfW | Multiconsult
EXECUTIVE SUMMARY
GET FiT Uganda | Annual Report 2018
7
D
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
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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
9
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
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“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
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GET FiT PORTFOLIO
RE Projects
17
158 MW
765 GWh/y
14
118 MW
Hydro Solar Bagasse
585 GWh/y
2
20 MW
34 GWh/y
1
20 MW
147 GWh/y
10
Projects Commissioned
55%
Capacity Installed
Of Portfolio
Capacity Installed
(MW)
Hydropower Bagasse Solar PV
Uganda
0
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
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TABLE OF CONTENTS
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p.47
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ABOUT GET FiT UGANDA
01
PROJECT PORTFOLIO STATUS
02
ENVIRONMENTAL AND SOCIAL
PERFORMANCE
03
GRID CONNECTION STATUS AND CHALLENGES
04
ACADEMIC CORNER
05
LESSONS LEARNED
06
OTHER ACTIVITIES
07
FINANCIAL STATUS
08
PROGRAMME MONITORING & RISK MANAGEMENT
09
OUTLOOK FOR 2019
10
GET FiT Uganda | Annual Report 2018
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GoU and KfW | Multiconsult
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GET FiT Uganda | Annual Report 2018
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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
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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
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T
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
01
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).
18
GoU and KfW | Multiconsult
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GET FiT Uganda | Annual Report 2018
19
A
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
02
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
2
Q1 2020
Q3 2019
Q3 2019
Q3 2019
Q2 2018
Q2-Q3 2019
Q4 2018
Q2 2017
Q1 2017
Q3 2015
Q1 2016
Q1 2017
Q4 2017
Q1 2017
Q1 2017
Q2 2017
Q3 2017
Q2 2015
Nkusi
Nyamagasani 1
Nyamagasani 2
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
Project
Developer
Financing
Agreement
(DFA)
Power
Purchase
Agreement
(PPA)
Financial
Close
Construction
Start
Commissioning
1
Generation
Licence
GoU and KfW | Multiconsult
20
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
1
Based on GET FiT estimates when developers are likely to complete commissioning tests.
2
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
21
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
22
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
23
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
24
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
3
in 2018. Figure 3 provides an overview of the location of the respective
projects of the portfolio. 
3
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.
25
GET FiT Uganda | Annual Report 2018
T
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)
11
20
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
26
GoU and KfW | Multiconsult
T
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.
16
28
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)
27
GET FiT Uganda | Annual Report 2018
T
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)
7
29
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)
28
GoU and KfW | Multiconsult
T
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)
1
2
3
4
5
6
7
29
46
46 46 46
Operational
Uganda
202020192018 2021 2022
Deemed Energy (GWh)
Planned Energy (GWh)
29
GET FiT Uganda | Annual Report 2018
T
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)
30
39
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)
30
GoU and KfW | Multiconsult
T
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
1.5
2
2.5
3
14
25
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)
31
GET FiT Uganda | Annual Report 2018
T
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)
6
16
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)
32
GoU and KfW | Multiconsult
T
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)
5
16
16
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)
33
GET FiT Uganda | Annual Report 2018
T
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)
35
44
87
147 147
14
12
10
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)
34
GoU and KfW | Multiconsult
T
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)
(in USD)
Hydro
Waki SHP
Operational
Uganda
35
GET FiT Uganda | Annual Report 2018
T
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)
(in USD)
Hydro
Siti 2 SHP
Under Construction
Uganda
Uganda
36
GoU and KfW | Multiconsult
T
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)
(in USD)
Hydro
Kyambura SHP
Under Construction
Uganda
37
GET FiT Uganda | Annual Report 2018
T
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)
(in USD)
Hydro
Sindila SHP
Under Construction
Uganda
38
GoU and KfW | Multiconsult
T
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)
(in USD)
Hydro
Ndugutu SHP
Under Construction
39
GET FiT Uganda | Annual Report 2018
T
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)
(in USD)
Hydro
Nyamagasani 1 SHP
Uganda
Under Construction
40
GoU and KfW | Multiconsult
T
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)
(in USD)
Hydro
Nyamagasani 2 SHP
Under Construction
Uganda
41
GET FiT Uganda | Annual Report 2018
T
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)
(in USD)
Hydro
Kikagati SHP
Under Construction
Uganda
42
GoU and KfW | Multiconsult
GET FiT Uganda | Annual Report 2018
43
S
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
03
3.1
GoU and KfW | Multiconsult
44
A
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
45
M
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
46
GoU and KfW | Multiconsult
Deemed Energy (percent) Planned Energy (GWh) Actual Energy (GWh) Deemed Energy (GWh)
GET FiT Uganda | Annual Report 2018
47
F
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
04
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
48
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.
1
2
4
6
3
5
7
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
high
high
GET FiT Uganda | Annual Report 2018
49
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
low
medium
GoU and KfW | Multiconsult
50
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
51
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
1
2
Total grid interconnection support
3
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
52
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
53
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
54
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
55
F
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
05
Figure 15 - Population Access to Electricity (including o-grid) and Firms’ Main Obstacle in Uganda 2013
GoU and KfW | Multiconsult
56
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
57
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
58
GoU and KfW | Multiconsult
58
GET FiT Uganda | Annual Report 2018
59
I
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
06
GoU and KfW | Multiconsult
60
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.
T
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.
4
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
61
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.
T
he release of a minimum ow
4
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
62
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.
T
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
63
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.
C
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
64
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.
T
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
65
GET FiT Visibility
07
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
66
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
67
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
68
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
69
T
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
70
E
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
71
I
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
72
A
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
73
Funding Commitments
08
8.1
Financial Status
G
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
74
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
75
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
76
GoU and KfW | Multiconsult
GET FiT Uganda | Annual Report 2018
77
Programme Monitoring
09
9.1
T
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
78
T
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
5
All Projects that have achieved nancial close are included. MW of commissioned projects in brackets.
6
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
79
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
n/a
66%
79%
79%
142.4
5
(87.1)
650.2
6
(270.8)
3
4
0.45
8,658
1.1
0
131
237
79%
4
5
4.03
4,200
2
1
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
80
T
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.
7
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
7
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
81
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)
5
12
100%
100%
832
100%
95%
0
0
80%
67%
n/a
n/a
n/a
4
8
100%
95%
199
0
0
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
82
T
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
83
R
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
84
Table 9 - Overview of Key Risks
Description of Risk Progress
high
high
medium
medium
medium
medium
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
85
I
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
10
www.gett-reports.com/2018