ORIO grant for mini hydropower and rural electrification project Uganda

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Launch ceremony Uganda

The Facility for Infrastructure Development (ORIO) contributes to the construction of 9 mini hydropower plants and a local distribution network in western Uganda. The project aims to connect more than 26,000 households to the local grid – and improve the connection for another 45,000 households.

Access to energy is an important driver for economic growth. It will contribute to transforming Uganda from a low-income country to a competitive middle-income country.

Improving access to (renewable) energy

Only 20% of Ugandans have access to electricity. This makes Uganda’s energy consumption per capita one of the lowest in the world. In rural areas, access to energy is even lower, with an access rate of just 7%. Connecting households to the electricity grid is an important next step for Uganda.

The increase in the capacity to generate power is a major achievement for the government of Uganda, together with development partners and the private sector. Equally important is that most of the new capacity is renewable - solar, hydro, geothermal. Challenges remain, however, especially when it comes to access to affordable, reliable and sustainable electricity.

The project

In the project area, electric power supply is either absent or unreliable and limited to a few hours a day. As a result, the majority of rural households depend on low-grade forms of energy in the form of biomass fuels (wood or charcoal) for cooking. Households lack electricity for lighting or for pumping up water.

The project includes the generation, transmission and distribution of electricity in western rural Uganda. It includes the construction of:

  • 9 mini hydropower plants in the mountainous area of western Uganda;
  • a local distribution network;
  • more than 26,000 new household connections to the local grid;
  • improving grid connections for another 45,000 households.

In total, the project aims to provide a stable, reliable and renewable electricity supply to 375,000 people who currently lack access to energy.

The launch ceremony of the project took place on 14 August 2017, in the presence of the Ugandan ministers for Finance and Energy, and the Dutch ambassador to Uganda.

Investment costs

The project is funded under the ORIO programme. The total project costs for the construction amount to € 38 million. The Netherlands will contribute € 12.2 million to this investment, about a third of the total project costs. The remaining € 25.8 million are covered by the government of Uganda.

The Netherlands has also contributed to the development phase of this project by financing the studies with a grant of € 883,000.

For the project to fully succeed, the actual household connections have to be constructed. The Rural Electrification Agency (REA) will co-finance these household connections.

Uganda and the Netherlands

The Netherlands has a special relationship with Uganda. Uganda is one of the countries with whom we have a so-called ‘transitional relationship’. Over time, the bilateral economic relationship between our 2 countries should prevail, and aid will be phased out.

The focus of the Dutch relationship with Uganda is on reducing poverty. But also on boosting economic growth, increasing market access and improving the business climate.

Successor to ORIO: DRIVE

The ORIO facility is no longer open for new applications. It has a successor, the Development Related Infrastructure Investment Vehicle (DRIVE), that is also open to projects in Uganda.

The Netherlands Enterprise Agency (RVO.nl) is responsible for the implementation of both ORIO and DRIVE.

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