Uganda to light up rural communities with new green energy project ahead of COP26

The East-African state unveiled the sustainability move as part of $650m worth of investments announced at Expo 2020 Dubai

(L to R) Abeine Abdul Adam, Imagine Pharmaceuticals CEO; UIA Chairman Morrison Rwakakamba; Minister of Finance, Planning and Economic Development Matia Kasaija; UIA Director General Robert Mukiza; Leon Lin, Worldera GM International (Jannah Whalley)

Uganda yesterday announce a new $500m energy project that will not only use renewable energy to help power the country but will work to deliver electricity to many of the country’s most isolated inhabitants.In sub-Saharan Africa, only around a third of those living in rural areas have access to electricity unlike three-quarters of those in cities – and closing this energy access gap has been one of the priorities to helping raise people out of poverty.

Yet extending the main grid to isolated areas has proved challenging as the unit cost of reaching those living there has deterred utility companies, not least as it often involves construction across challenging terrain, while the amount of electricity people can afford even when connected is usually much less than for those in cities, cutting profitability.

Yesterday’s announcement by the Uganda Investment Authority at the Expo 2020 Dubai will seek to address this imbalance in the East African country. It revealed that the $500m deal signed with the UAE conglomerate Connect would include a focus on “last-mile supply”, the official term for delivering power to those most isolated from it.This is important as without electricity communities are hampered in their development. And this is a gap the existing utility companies have often struggled to finance due to the costs involved.

According to the World Bank, in Sub-Saharan Africa the average deficits these companies already have already average 1.5% of their country’s GDP – while three countries topped 5% of GDP. They are a long way from being able to reach every village and every household.

The focus on renewable energy is also a welcome sign ahead of the upcoming COP26 talks in Glasgow as with a number of new oil projects soon to come online in Uganda there had been concern that it would be making an increasingly negative contribution to the climate crisis.

The announcement came as part of a $640 meal package of investment the country announced at Expo 2020 Dubai. It is the first major raft of investment deals announced at the Middle Eastern event.As well as the USD 500m for renewable energy and transportation projects, it included a USD 50 million investment by the Chinese company Guangzhou Wondfo Biotech Co to invest in a pharmaceutical facility for a new pharmaceutical facility to manufacture high quality diagnostics kits for HIV/AIDS, Malaria, TB, and other POC diagnostic technology.

Robert Mukiza, the Director-General of the Uganda Investment Authority, said: “Today’s announcement of investment of about USD 650m is part of our broader ambition to bring in USD 4 billion of new investment into Uganda to propel the country forward as it embarks on its post-pandemic recovery journey.

“We are currently promoting about 79 bankable projects at different stages of development that are ready for investment. Our partners therefore have a wide variety of investment options to pick from.”

It came after the UAE’s Minister of Tolerance and Coexistence and the Commissioner-General of Expo 2020 Dubai, Sheikh Nahyan bin Mubarak Al Nahyan, had welcomed Uganda to the event. “As one of the fastest growing economies in East Africa and one of the country’s with the youngest population in the world, Uganda’s presence at Expo highlights a journey of growth and development,” he said.

The other investments that Uganda signed Letters of Intent for yesterday included a $50m investment by Dubai-based Worldera Corporation to invest in mineral processing and the conglomerate Modern Group which committed $50m investment in areas including the manufacturing of tiles and the development of mining operations.

The UK’s Modha Investments, also agreed a multimillion dollar commitment to focus on the development and commercialisation of cashew nuts, macadamia nuts and avocados in the country.