Promotion of Mini Grids for Rural Electrification in Uganda

Project description

Title: Promotion of Mini Grids for Rural Electrification in Uganda
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ), German Climate Technology Initiative (DKTI), European Union
Country: Uganda
Lead executing agency: Ministry of Energy and Mineral Development (MEMD)
Overall term: 2016 to 2022

Installation of solar panels in one of the villages benefiting from the installation of 40 solar mini grids in Northern and Southern Uganda  © GIZ PREEEP

Context

Uganda has great potential for generating power from renewable sources such as solar, hydro, biomass and wind. However, only about 50 per cent of the population has access to any kind of electricity, with around 24 per cent of them accessing Tier 1 (electricity supply for more than four hours per day). Outside of the cities, where 70 per cent of the population lives, electrification is a mere 38 per cent. This presents a major barrier to economic development and poverty reduction. Mini grids offer a viable solution for this as they can supply reliable and grid-like electricity in most villages where grid extension is unaffordable.

The Ministry of Energy and Mineral Development (MEMD) seeks to promote private investment for mini grids in Uganda. However, the policy and regulatory framework for mini grids still needs to be developed to enable mini grid projects to reach the necessary scale.

Objective

The project is improving the framework conditions for scaling up private sector investment in the distribution of electricity from renewable energies via mini grids.

Minister of State for Energy commissioning the 25 solar mini grids set up in Northern Uganda © GIZ PREEEP

Approach

In its bid to promote mini grids for rural electrification, the project operates on four levels:

  1. Policy and steering: improving public actors’ capabilities in electrification planning, policy and regulations, and sustainable business models.
  2. Regulatory instruments: developing instruments and mechanisms such as a reverse auction tender model for bundled projects that promote private sector engagement and provide investment security.
  3. Technology and design: building private sector capacities in planning, installing and operating mini grids. The project also supports technical and vocational education and training (TVET) for solar and mini grid technicians.
  4. Productive Use: providing trainings and access to finance for small and medium enterprises, smallholder farmers, and households, ensuring electricity is used to drive economic development and making the mini-grid business model sustainable.

Last update: April 2022

Demonstrating the productive use of electricity in the villages where solar mini grids have been set up.  © GIZ PREEEP