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Shedding light on Uganda: A dark regime

- Kristoffer Heitmann Wolsing, Bart Bakker, Thomas Rasmus Brenbjerg Nielsen,

Thomas Wesley Shaffer & Magnús Halldórsson

Spring Semester 2015

MSc Sustainable Energy Planning & Management

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Aalborg University

Semester: 2

Project title: Solar electrification in rural Uganda

Project Period: 3rd February 2015 – 3rd June 2015

Semester theme: Sustainable Energy Planning in

an Institutional and Societal Perspective

Supervisor:

Frede Hvelplund

This report presents a qualitative analysis performed

through the theory of Multi Level Perspective and

Phronetic Planning into the electricity regime of

Uganda, East Africa. The country, with poor

electrification rates especially in rural areas,

maintains a regime that mainly focusses on

attracting large investors that contribute to grid

extension, the primal approach for rural

electrification. Niche investigation shows that

Swarm Electrification (SE), an off-grid solar PV

solution that can be initiated by rural inhabitants or

small communities by interconnecting purchased

Solar Home Systems (SHS), serves as a beneficial

technology for rural electrification. The most

feasible of SHS are, within the current regime,

accessible for 91% of the rural population. An

analysis of the solar market in Uganda shows that

there is a focus towards the emergence of mini-

grids, supported by the government, donors and the

private sector. This window of opportunity, amongst

others, allows for large scale electrification by

Swarm Electrification.

Group number: 2

Group members:

Kristoffer Heitmann Wolsing

Bart Bakker

Thomas Rasmus Breinbjerg Nielsen

Thomas Wesley Shaffer

Magnús Halldórsson

_________________________________

Number of copies: 2

Number of pages not including

Appendix: 71

Uploading code:

Number of pages in Appendix: 21

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Preface This report is written by students in the second semester of the Masters program ‘Sustainable Energy

Planning and Management’ at Aalborg University. It has been constructed on the basis of the semester

theme: Sustainable Energy Planning in an Institutional and Societal Perspective. To progress a suitable

result there has been utilized acquired knowledge from the lectures throughout the project.

Our sincerest thanks go to the IDEAS Team in Uganda, whom has been an on going support through

knowledge sharing and on-the-ground information on reel-life Uganda exterior from virtual literature.

The same thanks go to Mr. Godfrey Kabbayanga, the Mayor of Kasese City, Uganda, who has

enlightened us with details of local peoples everyday life in Uganda, to get a better understanding of the

cultural differences and behaviours. At last a special thanks to Frede Hvelplund, our project supervisor,

who has supplied us with the necessary guidelines and advice to shape our project.

We wish you a pleasant reading and hope to supply with helpful results.

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Abbreviations ECC: Electricity Consumer Committees

ERA: Electricity Regulatory Authority

FDI: Foreign Direct Investment

FMA: Foggy Mountain Approach

GDP: Gross Domestic Production

GEF: Global Environmental Facility

IEA: International Energy Agency

IPP: Independent Power Producers

MCA: Mountain Climbing Approach

MEMD: Ministry for Energy and Mineral Development

MLP: Multi-Level Perspective theory

NGO: Non Governmental Organisation

NPA: National Planning Authority

PV: Photovoltaic

PVTMA: Photovoltaic Target Market Area

REA: Rural Electrification Agency

REB: Rural Electrification Board

REF: Rural Electrification Fund

RES: Renewable Energy Solutions

SE: Swarm Electrification

SHS: Solar Home Solutions

UECCC: Uganda Energy Credit Capitalisation Company

UEDCL: Uganda Electricity Distrubution Company Limited

UEGCL: Uganda Electricity Generation Company Limited

UETCL: Uganda Electricty Transmission Company Limited

UGX: Ugandan Shillings

UN: United Nations

USD: United States Dollars

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Table of Contents

Preface .......................................................................................................................................................... 4

Abbreviations ................................................................................................................................................ 5

Table of figures ............................................................................................................................................. 9

1.0 Introduction .......................................................................................................................................... 10

1.1 Global Energy Landscape .................................................................................................................. 11

1.2 Uganda Energy Landscape ................................................................................................................ 12

1.3 Rural Energy Landscape .................................................................................................................... 13

1.4 Household Energy Landscape ........................................................................................................... 14

1.5 Potential for Solar Energy ................................................................................................................. 15

2.0 Problem Formulation ............................................................................................................................ 16

3.0 Research Question ................................................................................................................................ 17

4.0 Methodology ......................................................................................................................................... 18

4.1 Mountain Climbing Approach ........................................................................................................... 18

4.2 Foggy Mountain Approach ................................................................................................................ 19

4.3 Methods and theories ....................................................................................................................... 21

4.3.1 Multi-Level Perspective .............................................................................................................. 21

4.3.2 Phronetic research ..................................................................................................................... 23

4.4 Theoretical Approach ........................................................................................................................ 25

4.4.1 MLP ............................................................................................................................................ 25

4.5 Project Structure/Delimitations ........................................................................................................ 26

4.5.1 Map of Research Pathway ......................................................................................................... 26

4.6 Limitations ......................................................................................................................................... 29

4.6.1 Research ..................................................................................................................................... 29

5.0 Electricity Policy and Governance Analysis ........................................................................................... 30

5.1 Findings ............................................................................................................................................. 30

5.2 Discussion of the findings ................................................................................................................. 32

5.2.1 Where are we going with planning? .......................................................................................... 32

5.2.2 Who gains and who loses, and by what mechanisms of power? .............................................. 34

5.2.3 Is this development desirable? .................................................................................................. 36

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5.2.4 What can we do about it? .......................................................................................................... 36

6.0 The solar market ................................................................................................................................... 38

6.1 Solar PV market segments ................................................................................................................ 38

6.2 Solar market & regime ...................................................................................................................... 39

7.0 Business case......................................................................................................................................... 42

7.1 Assumptions ...................................................................................................................................... 42

7.2 Monthly Household Income ............................................................................................................. 42

7.3 Monthly Expenditure for Kerosene and Mobile Phone Charging ..................................................... 43

7.4 Subsidies ........................................................................................................................................... 44

7.5 Micro-financial options for solar home solutions ............................................................................. 44

7.6 Annuity loan method ........................................................................................................................ 44

7.7 Limitations ......................................................................................................................................... 45

7.8 Calculation ........................................................................................................................................ 46

7.9 Results ............................................................................................................................................... 47

7.10 Findings ........................................................................................................................................... 50

8.0 The Niche .............................................................................................................................................. 50

8.1 Service delivery models .................................................................................................................... 50

8.2 The niche: Swarm Electrification ...................................................................................................... 51

9.0 Windows of Opportunity ...................................................................................................................... 54

9.1 Reconfiguration pathways ................................................................................................................ 54

9.1.1 Decreasing price of SHS ............................................................................................................. 55

9.1.2 Increase in retailer competition ................................................................................................. 55

9.1.3 Increasing awareness for consumers ......................................................................................... 55

9.1.4 Increasing rural incomes ............................................................................................................ 55

9.1.5 Increasing demand for telecommunication devices .................................................................. 56

9.1.6 The chicken-egg phenomenon ................................................................................................... 56

9.2 Transformation pathways ................................................................................................................. 56

9.2.1 Governmental focus on mini-grids ............................................................................................ 56

9.2.2 Governmental & donor focus on institutional PV ...................................................................... 57

9.3 Technological substitution pathways ............................................................................................... 57

9.3.1 Grid extension ............................................................................................................................ 58

10.0 Suggestions ......................................................................................................................................... 59

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10.1 Building social networks ................................................................................................................. 59

10.1.1 Local energy planning .............................................................................................................. 59

10.1.2 Utilization of young volunteers ................................................................................................ 60

10.2 Articulation of visions and expectations ......................................................................................... 60

10.2.1 Adopt swarm as a method for grid extension ......................................................................... 60

10.2.2 Create secure financial environment ....................................................................................... 60

11.0 Conclusion ........................................................................................................................................... 62

12.0 Further investigation ........................................................................................................................... 65

12.1 Consumer influence ........................................................................................................................ 65

12.2 Tribal influence ............................................................................................................................... 65

12.3 Practical implementation of Swarm Electrification ........................................................................ 65

12.4 International politics ....................................................................................................................... 65

12.5 Rural urban migration ..................................................................................................................... 66

12.6 Reliability of delivery on subsidies .................................................................................................. 66

References .................................................................................................................................................. 67

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Table of figures Figure 1 Zaina, her house and family members .......................................................................................... 10

Figure 2 Africa, the dark continent ............................................................................................................. 11

Figure 3 Uganda electricity mix (Acode 2014) ............................................................................................ 12

Figure 4 Future electricity mix (National Planning Authority 2013) ........................................................... 13

Figure 5 Uganda energy mix (Acode 2014) ................................................................................................. 14

Figure 6 Tadoobas ....................................................................................................................................... 15

Figure 7 Global horizontal irradiation ......................................................................................................... 15

Figure 8 The participation-poverty-problem model ................................................................................... 16

Figure 9 Mountain Climbing Approach ....................................................................................................... 18

Figure 10 A foggy path is still traversable ................................................................................................... 19

Figure 11 The hierarchy of the levels in MLP .............................................................................................. 23

Figure 12 Theoretical approach of MLP ...................................................................................................... 25

Figure 13 Map of Research Path ................................................................................................................. 28

Figure 14 Actors in the regime .................................................................................................................... 31

Figure 15 Share of Rural Household for which SHS is economically feasible ............................................. 49

Figure 16 Four stages of swarm electrification ........................................................................................... 51

Figure 17 The Swanson Effect (Bloomberg, New Energy Finance) ............................................................. 55

Figure 18 Electricity-Prosperity relation ..................................................................................................... 56

Figure 19 Map of the national grid of Uganda, provided by UEDCL ........................................................... 57

Figure 20 SWARM virus spreading .............................................................................................................. 58

Figure 21 Niches in Local energy planning .................................................................................................. 59

Figure 22 Visualization of local MLP ........................................................................................................... 60

Table 1 Electricity policy and governance analysis, key points. .................................................................. 30

Table 2 Six segments on Solar PV ............................................................................................................... 38

Table 3 Uganda National Survey 2011/2012 Monthly Income Categories for Rural Households .............. 42

Table 4 Midpoints of monthly income categories ...................................................................................... 43

Table 5 Monthly expenditure on kerosene and mobile phone charging ................................................... 43

Table 6 SHS specifications ........................................................................................................................... 43

Table 7 Company systems and financing plans .......................................................................................... 44

Table 8 Micro-lending institutions and loan specifications ........................................................................ 44

Table 9 Micro lending options .................................................................................................................... 46

Table 10 Company financing and payment plans ....................................................................................... 47

Table 11 15Wp BBOXX System ................................................................................................................... 47

Table 12 50Wp BBOXX System ................................................................................................................... 47

Table 13 50Wp SolarNow System ............................................................................................................... 48

Table 14 50Wp SolarNow System with Subsidy.......................................................................................... 48

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1.0 Introduction Near the equator of East Africa, in a rural village

of Kasese district, Uganda, 17 year old Zaina

Rashid heads a household consisting of her five

younger sisters and nieces (Renno 2012). They

are grateful to live in a house they are

borrowing, made of mud and thatch; though

during Uganda’s two rainy seasons (spring and

fall) it is impossible for them to stay completely

dry. Through struggles and perseverance, Zaina

provides for the family by way of petty trading

of food, which yields an income of

approximately 20,000 Ugandan shillings (UGX)1

per week (approx. 6.6 US$). Zaina supplements

this modest income farming for others in order

to pay for medical bills, school fees and other

necessary costs. “Our main challenges are lack

of food, as we are only able to consume one

meal per day, lack of scholastic materials and

the cost of medical treatment when we are

sick,” says Zaina (lbid).

As is the case with 27% of rural Ugandans, Zaina

and her family are facing poverty; a complex

and vicious cycle of hardship in which a lack of

food, education, health, wealth, and jobs are

both causes and effects of a destitute

livelihood. Even though Zaina represents an

extreme case, almost 10% of rural Ugandans

face even worse poverty (Uganda Bureau of

Statistics 2014). Despite having to endure these

extreme conditions, Zaina resolves to overcome

poverty through her determination, viewing

education as the key for establishing a more

fruitful life, “four of my sisters are in school and

I myself have completed level O. I would like to

continue my education and join a vocational

institution to help me get a job and increase my

1 UGX to USD conversion 3035 to 1

income generating opportunities”. Zaina also

hopes one day to be able to build a house for

the family on the plot of land her grandfather

left her (lbid.). Zaina uses daylight to accomplish

the work she needs in order for her and her

family to survive and like 90% of rural

Ugandans, she relies on kerosene lamps, or

tadooba, to illuminate her small hut when the

sun sets. Not only is this kerosene very

expensive for Zaina, but it also is a poor source

of light to accomplish her studies and worse

yet, it generates toxic indoor pollution, which

threatens her family’s health.

For families living in Denmark, Zaina’s plight is

difficult to relate to. Even the poorest

individuals benefit from government assistance

and access to modern energy services. When

students wish to study at night, they are able

easily turn on a light and boot up a computer –

usually without giving it a second thought. As

students and researchers, the authors of this

Figure 1 Zaina, her house and family members

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paper wonder how electricity might help Zaina

accomplish her goals.

Imagine now that Zaina has a solar photovoltaic

(PV) panel on the roof of her family dwelling.

Even with a small PV system, Zaina is able to

replace her tadooba with an electric LED (light-

emitting diode) lamp and is saving money every

month from foregoing the purchase of

kerosene. She uses this money to pay off the

micro-loan, which gave her the financial ability

to acquire the PV system. Additionally, by

connecting her PV

system with her

neighbor’s Zaina

trades the electricity

that she doesn’t use

for cash, increasing

her family’s income.

Eventually she is able

to invest in a larger

PV system, which

enables her to buy an

electric refrigerator

that Zaina uses to sell

cold drinks on hot

days. Ultimately,

Zaina earns enough

money to begin

building her dream

house on her

grandfather’s land.

The authors of this

paper wonder if this vision can be a reality.

1.1 Global Energy Landscape

Zaina’s story is not unlike many throughout

Africa, sometimes referred to as “the dark

continent” (Figure 2), Sub-Saharan Africa,

Uganda in particular, is fast growing, mostly

young, rural, and without access to electricity.

In lieu of climate change and efforts to reduce

global poverty, organizations such as the

International Energy Agency, United Nations,

and World Bank tout access to modern energy

services as a crucial element for human well-

being and sustainable economic development.

The World Energy Outlook 2014 reports

approximately 1.3 billion people still without

electricity access and 2.7 billion people rely on

burning fuelwood and charcoal for cooking

which induces toxic indoor air pollution

(International Energy Agency 2014).

On 18 May 2015,

leaders of

government,

business, and civil

society representing

over 40 nations met

in New York City for

the Second Annual

Sustainable Energy

for All Forum

(Sustainable Energy

for All 2015). United

Nation’s (UN)

secretary and CEO of

Sustainable Energy

for All (SE4All)

Kandeh Yumkella

announced that

“[o]ur mantra going

forward is very

simple: converting

commitments to kilowatt hours for real people,”

(lbid). SE4All, a UN initiative launched by

Secretary-General Ban Ki-moon, urges world

leaders to achieve three goals by 2030: 1)

universal access to modern energy services 2)

double the global rate of improvement in

energy efficiency, 3) double the share of

renewable energy in the global energy mix

(Sustainable Energy for All 2011).

Figure 2 Africa, the dark continent

UGANDA

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79%

10%

7%3%

1%

Large hydro

Thermal plant

Mini-hydro plants

Co-generating usingbagasse

Imports

According to the International Energy Agency,

modern energy services have two components:

1) access to electricity and 2) access to clean,

safe cooking technologies (International Energy

Agency 2015). SE4All applies a third criterion,

modern energy services that are sustainable:

reliable, affordable, economically viable, socially

acceptable, and environmentally sound (United

Nations General Assembly 2012). The energy

sector in general is responsible for a vast

amount of pollution, so it is critical that the

achievement of more access to energy is

happening in a sustainable manner. According

to an IEA report, emphasizes on

electrification of areas with less

access to electricity have to be

considered as a serious issue. In

this regard, Sub-Sahara Africa,

with the lowest level of

electrification in the world,

should be of more concerns for

international and local policy

makers. (F.S. Javadia 2013). The

Energy Outlook Report 2014

urges that investment in

modern energy services in

developing nations must

increase three fold in order to

reach SE4All targets for access

by 2030.

1.2 Uganda Energy Landscape

Developing countries such as Uganda are major

recipients of foreign investment, especially for

the purpose of advancing energy infrastructure

(Santander 2015). In 2012, Uganda was the

recipient of 1.2 billion USD in foreign direct

investment (FDI) (United Nations Conference on

Trade and Development 2014), the highest FDI

among East-African countries (Santander 2015).

Historically, a great share of foreign investment

in Uganda comes from the World Bank, UN, and

western nations such as the United States

(Kynge 2014). However, Uganda news, The

Independent, reports that in 2012, Chinese

investments in Uganda were approximately 596

million USD (Businge 2014), nearly 50% of the

UN reported FDI. As domestic growth in China

slows, Chinese investors are increasingly looking

toward to Africa for opportunities (Emerging

Capital Partners 2013). Proven oil reserves in

Uganda’s northwest and a large potential for

hydropower production make Uganda an

attractive venture (Mugabe 2015). Already,

most of Uganda’s electricity generation comes

from hydroelectric dams. In 2012, the

commission of the 250 MW Bujagali Power

Station brought Uganda’s installed hydro dam

capacity to over 690 MW, or approximately 79%

of total electricity generation. Figure 3 shows

the electricity mix in Uganda with total installed

capacity exceeding 800 MW.

Prior to 2011, drought and inadequate capacity

were contributing factors to load-shedding (also

Figure 3 Uganda electricity mix (Acode 2014)

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11%

4%

57%

12%

4%2%

10%

hydro power

geo-thermal

nuclear

solar

biomass

peat

thermal

Figure 4 Future electricity mix (National Planning Authority 2013)

known as rolling blackouts2). With Bujagali

online, installed capacity exceeds peak demand

of 600 MW (The Independent 2015). However,

demand for electricity grows by 10% per annum

(PWC, 2013) which prompts the expectation

that load-shedding will return within the next

three years as future hydro dams are still under

construction (Ssekika 2015). The prospects of

load-shedding threatens Uganda’s emerging

manufacturing sector which accounts for

approximately two-thirds of total electricity

demand (Umeme 2014) and relies on stable

electricity to keep production costs low.

Although agriculture remains the core of

Uganda’s economy,

employing 70% of the

nation’s workforce,

manufacturing increasingly

accounts for a broadening

share of Uganda’s 25 billion

USD gross-domestic product

(Oling, Rwabizambuga and

Warren-Rodriguez 2014),

(World Bank 2013).

The National Planning

Authority’s Vision 2040 aims

to achieve “a transformed

Ugandan Society from a

Peasant to a Modern and Prosperous Country

within 30 years,” focusing on, among other

things, major infrastructure development –

including advancements in energy (National

Planning Authority 2013). Vision 2040 calls for

over a 60-fold increase in electricity generation

capacity over the next 25 years with nuclear

power serving a primary role in future base-load

production. Figure 4 shows that 57% of

2 act of deliberately disconnecting areas from the

electricity grid in order to maintain grid stability

electricity generation will come from nuclear

and 12% from solar. In June of 2014, Uganda

President Yoweri Museveni claims, “We will get

some energy from geothermal. But Uganda

needs over 50,000MW. Where will the rest

come from? If the cost of production per unit

lowered, then solar energy would be the

solution. Meanwhile, I prepare the country for

nuclear energy,” (The State House of Uganda

2014). In the same address, President Museveni

claims that rising labor costs in China and India

will incentivize factories moving to Uganda

where labor costs are low, furthering the cause

to ensure a stable electricity grid as a top

economic priority of the Uganda National

government (National Planning Authority 2013).

1.3 Rural Energy Landscape

Up until this point, the description of Uganda’s

energy landscape refers exclusively to electricity

which only accounts for 1.3% of Uganda’s

overall energy mix. Figure 5 shows that

Ugandans meet the majority of their energy

needs by burning fuelwood and charcoal;

primarily for the purpose of cooking. Only 15%

of Ugandans have access to the national

electricity grid, most of whom live in urban

areas where the grid exists. For the 85% of

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79%

9%

6%5%

1%

Fuel wood

Petroleum products

Charcoal

Biomass residues

Electricity

Ugandans still living in rural areas, access to the

electricity grid is strikingly limited, equaling only

about 7% of people (Energypedia 2013).

Rural household’s such as Zaina’s lack access to

the national electricity grid either because

connection is too expensive or their location is

too remote. Patrick Bitature, board chairman of

UMEME3, the main electricity distribution

company in Uganda, tells Uganda newspaper

The Weekly Observer that the average cost of

establishing a grid connection requires 200 USD

(Ssekika 2015), or approximately 600,000 UGX,

over 7 times Zaina’s monthly income.

Moreover, because national

budgets are tight, investment in

grid extension focuses mostly

on servicing relatively large

population centers, requiring

densities which many rural

villages do not have.

1.4 Household Energy

Landscape

Without electricity from the

national grid, rural households

rely on fuelwood, charcoal,

kerosene, diesel generators,

and increasingly solar panels to

fulfill their energy demands. Unfortunately, the

former four options are much more prevalent in

Uganda than the latter one. It seems that solar

solutions are not very much present within the

landscape. Burning fuelwood for cooking and

kerosene for lighting leads to harmful exposure

to indoor pollutants, contributing to over

20,000 Ugandan deaths each year (World

Health Organization 2007). The World Bank

3 UMEME is a private investor in concession with the

national electricity distribution utility, UEDCL

claims that breathing kerosene fumes is the

equivalent of smoking two packs of cigarettes

each day (USAID 2013). According to the

Uganda National Household Survey 2012/2013

respiratory infection4 is the number one major

health symptom reported at health care clinics

in the country, 25% of all the major symptoms,

which included amongst other Malaria that

came in second with 19% reported symptoms

(Uganda Bureau of Statistics 2014).

Additionally, kerosene lanterns, or tadoobas,

are an inadequate source of light, emitting too

few lumens required to properly read and

write. This makes it difficult for the student to

complete homework and the teacher to grade

homework (Pearson 2013), negatively

impacting educational attainment.

Education is crucial for many reasons including

producing a skilled and productive workforce,

positively contributing toward socioeconomic

wellbeing of households and communities

(Ibid.). Through educational achievement, poor

people are able to attain confidence, resistance

4 Lung disease

Figure 5 Uganda energy mix (Acode 2014)

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for oppression and involvement in political

process (Kanagawa og Nakata 2008).

Electricity consumption per capita has

significant impact on GDP per capita as well

as education, as shown in the Appendix 2, it

reduces household’s chores and allows

children the opportunity for school

attendance and educational activities, such as

sufficient luminescence for studying in the

evenings (Ibid.). Furthermore access to

information and communication technologies

such as a radio, TV or a computer has

educational value and can also provide safety

in rural areas (Ibid.).

1.5 Potential for Solar Energy Although Uganda rests on the equator and

receives an abundance of solar irradiation as

shown in Figure 7, clean energy alternatives

such as solar photovoltaic systems are relatively

underutilized. German international

development company, GTZ, estimates in 2009

that total Uganda household solar systems

equal 200 KWp when actual potential is

approximately 65,000 KWp, a 300% gap in

potential (Kyezira 2009). Mayor of Kasese

Municipality, Godfrey Kabbyanga, points to four

main reasons why households are not widely

adopting solar energy: upfront cost, tradition,

awareness, and attitude (Kabbayanga 2015).

To further elaborate Mayor Kabbyanga’s points,

the cost of solar may still be prohibitive,

particularly for households experiencing

poverty (Piggins 2014). Solar system designs

often neglect the specific needs of an individual

household, leading to mismatch in what a solar

system intends to provide and what a system

should provide (Hirmer and Cruickshank 2014).

Households are not always aware of the costs

or benefits of solar home systems. Finally,

attitudes toward adopting new technologies

require a higher degree of community

participation and ownership over projects.

UGAN

Figure 7 Global horizontal irradiation

Figure 6 Tadoobas

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2.0 Problem Formulation

“The mere formulation of a

problem is far more essential than

its solution, which may be merely a

matter of mathematical or

experimental skill. To raise new

questions, new possibilities, to

regard old problems from a new

angle requires creative imagination

and marks real advances in

science”

-Albert Einstein

The global landscape pressures Uganda to

develop electricity access in a sustainable,

reliable and affordable manner and access to

clean cooking facilities. Despite this,

electrification rates are low, especially among

the extreme poor living in remote rural villages.

Consequences of this are health problems, lack

of education, and paradoxically poverty itself.

From the survey conducted in Kasese district,

many of these poor inhabitants feel like they do

not have a voice in the process of electricity

planning. In the introduction is

stated that the current electricity

supply is mainly generated by large

hydropower plants. This leads to the

hypothesis that the current regime

is not prioritizing large scale

electrification by communicating to

the end-consumer, but mainly

focusses on the adoption of large

power sources within the national

grid and extending this grid. Despite

the solar potential stated in the

introduction, It seems that off-grid

solar solutions are not being

adopted on a large scale, leading to

the expectation that they are either

not feasible, or there is no

knowledge and awareness on the feasibility of

them. This enhances the expectation of

government not aiming towards supporting

such solutions. These findings come down to

three problems, leading up to the research

question. The problems are as follows:

The electricity regime is not leading up to

large scale rural electrification

Lack of electricity leads to a lack of

education, health and financial capacity

leads to low participation within the

electricity regime leads to a lack of

electricity for rural households

Within the current regime, off-grid solar

solutions are either too expensive for the

average rural household, or there is a lack

of knowledge and awareness for such

solutions.

Interrelated, these problems can be illustrated

in the model shown in Figure 8 below: These

problems and hypothesis’ can be consolidated

into a research question.

regime

low electricity

low health

low education

low skills

low jobs

low income

low participation

Figure 8 The participation-poverty-problem model

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3.0 Research Question The problem formulation results in the following research question:

How can the solar potential in Uganda be utilized in electrifying off grid

rural households and be consolidated in the (electricity) regime?

In order to answer this question, the following sub questions are created:

What is the current landscape concerning electricity in Uganda? (introduction)

What is the electricity regime for (rural) electrification?

What solar solutions are available and how are they implemented in the current regime?

What is the economic feasibility of these solar solutions?

What niches can be determined with this solar solution?

What windows of opportunity can be determined in which niches can emerge?

What suggestions would enlarge these windows or create new windows within the regime

through which the niche can flourish?

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Figure 9 Mountain Climbing Approach

4.0 Methodology

4.1 Mountain Climbing Approach

Imagine arriving at the base of a mountain with

the ambition of climbing to the top. At first,

you are unsure if it is possible to reach the

peak, but then a group of people arrive

alongside you with the same ambition.

Suddenly you are emboldened by the idea that

if you climb together, you will reach the top.

This is essentially the impetus of this research

project. The Sustainable Energy Planning and

Management program challenges their students

with a semester research project and the

method they employ to choose groups and

project topics lends itself to natural selection.

In other words, students have the freedom to

select the right group with the right topic. The

topic of studying energy in Uganda was not one

of the suggested projects but instead an idea

volunteered by one of the energy planning

students.

“The developing world is experiencing

tremendous growth in population and

economy. Consequently, these growth

pressures present a plethora of energy

challenges including finding feasible and

renewable solutions for electrification.

With emerging technologies and methods

of financing, the path of development can

go in many different directions! This

project idea aims to investigate

innovations which are challenging our

preconceived notions of how growth will

happen in developing areas.”

- Thomas Shaffer

There was a variety of available

topics, all with their own set

of challenges, however

the prospects of

planning for rapidly

developing areas on a different continent

presented a particularly unique opportunity.

The students who were attracted to this idea

are of a particular calibre: ambitious, highly

curious, and relatively comfortable with

uncertainty. The students who elected to

pursue this topic are the authors of this paper.

After utilizing the Belbin Team Personality

Analysis Tool, the authors discovered that

indeed their group composed of innovators,

ideators, explorers, and leaders. Despite this,

the test was also effective in

revealing some of their

weaknesses including lacking

organization, analysis, and

‘completer’ skills.

Recognizing a unique

mix of strengths and

shortcomings, the

authors embarked

on a discussion

regarding which

management

style would

best suit

our

group.

Page 19 of 97

After going through a number of management

methodologies, the authors decided to create

their own, naming it the Mountain Climbing

Approach (MCA) see Figure 9.

MCA intends to be a highly flexible approach to

accomplishing goals, relying on patience,

communication, and leadership on the part of

each group member. In essence, MCA

champions the notion that each group member

first agrees that there is a “top of the

mountain” which they wish to reach, then

agrees that they must work together to

embrace group strengths and overcome group

weaknesses in order to succeed. In the early

stages of our work, it is not entirely clear what

is at the top of this metaphoric mountain, but

the group must do their best to communicate

their ambitions, hopes, and expectations in an

attempt to identify the path forward. By setting

small goals, or checkpoints, it is easy for the

group to measure progress and group capacity.

In this process, group members are encouraged

to freely express their opinions and ideas as

challenges arise. Eventually, a natural group

rhythm emerges in which individuals take turns

leading the group up “the mountain”.

4.2 Foggy Mountain Approach As aforementioned, the challenges of

electrifying Uganda are complex with many

interconnecting and mystifying pieces.

Attempting to research and generate ideas for a

solution from a classroom in Aalborg, Denmark

is both a bold and naïve venture. First, coming

from a position of abundant access to

electricity, the authors of this paper lack key

insights regarding the worth of electricity.

Moreover, having never experienced a life of

rural poverty makes it virtually impossible to

relate to such a livelihood of drudgery. Finally,

without visiting Uganda, let alone living there,

the authors of this paper do not possess a

cultural cognitive awareness nor understanding

of nuanced traditions which cumulate to explain

the values and behaviors of Ugandan people.

This leaves the authors of this paper and their

attempts to understand the Uganda energy

system “in a fog” (see Figure 10).

The Foggy Mountain Approach is the realization

and acceptance that a problem is so complex

and the researchers are so far removed from

the problem that attempting to correctly

identify and “solve” the problem is confusing

and difficult to measure, likened to climbing a

mountain in a very dense fog. Without

visualization of the mountain’s peak (or

problem statement) researchers are forced to

start with their own perspective of the problem

and attempt to navigate the study area by

means most available to them. However, even

in the densest fog, one may still be able to see a

few steps ahead. This is the benefit of

employing the MCA, which allows for short-

sighted but flexible goals which enable

footholds up the mountain. For the authors of

this paper, finding a path of research was

difficult however through interviews and

investigation, they were able to follow in the

footsteps of researchers which went before

them (see preface for acknowledgements).

Figure 10 A foggy path is still traversable

Page 20 of 97

PHRONETIC RESEARCH TOOL The phronetic research method serves as the primary tool for analyzing the power and values within the Uganda energy system. This method asks four main questions: • Where are we going with

planning? • Who gains and who loses, and by

what mechanisms of power? • Is this development desirable? • What, if anything should we do

about it?

MULTI-LEVEL PERSPECTIVE (MLP)

The MLP is the glasses the authors see through the mountain fog. This perspective reveals the Uganda energy system’s:

Landscape

Regime

Niche opportunities

MAP OF RESEARCH PATHWAY

There are virtually infinite pathways for researching the complexity of the Uganda energy system, however this map illuminates the pathway in which the authors of this paper take and reflects upon pathways which they choose not to take.

MOUNTAIN CLIMBING GEAR the authors of this paper employ a variety of methods in order to climb the foggy mountain of Uganda’s energy system.

Page 21 of 97

4.3 Methods and theories

To reach the top the right tools are needed in

form of theories and methods described in this

chapter. These are firstly explained in a

theoretical context, and secondly in the

theoretical approach it is elaborated how they

are utilized in this project.

In this report there are two theories utilized to

answer the Research Question, the Multi-Level

Perspective and Phronetic Research. A

transition is acknowledged and it seems like

there is an undesirable pathway in the current

energy discourse of Uganda, the lack of

electricity in the rural areas is by the authors of

the project seen as a vast problem for Uganda,

due to the large population living there. Small

innovations on the local level are hypothesized

to occur as a solution to the lack. When having

this believe the MLP theory is thus considered

most suitable for the project. As this theory is

approved, the Phronetic Research method is

seen appropriate to analyse the regimes power

and values because it gives the researcher the

freedom to subjectively judge whether the

existing regime is desirable. Below the two

theories are explained in depth and later how it

has led to the theoretical approach of this

project.

4.3.1 Multi-Level Perspective

The multi-level perspective (MLP) theory is

utilized in this report as a tool for

understanding sustainable transitions and

hence as a theoretical approach for the

development of the project. This project is set

out to find a niche, in the form of a technology

or an organisation model, which could

potentially change the landscape of Uganda.

The expectation of the authors is that within

the current situation, in which electrification

rate is low, there is the possibility of introducing

new technologies that could take off and

emerge within the system, possibly increasing

household electrification.

It defines the framework of the report and

helps in identify the red-thread5 throughout it.

The understanding of the theory is derived from

Frank W. Geels description in the Journal of

Transport Geography in the section: “A socio-

technical analysis of low-carbon transitions:

introducing the multi-level perspective into

transport studies”, described below.

The theory states that to change a given course

to a better alternative; deep structural changes

needs to happen (Geels 2012). This happens in

a socio-technical approach, which includes

technology, policy, markets, consumer

practises, infrastructure, cultural meaning and

scientific knowledge (Ibid.). These categories

are defined as “socio-technical systems” and

are all maintained and changed by various

actors. Thus it is a broad approach to

sustainable development and the transition is

as Geel expresses it: “seen as co-evolutionary

processes, which take decades to unfold and

involve many actors and social groups” (Ibid).

Where other transition theories often approach

a more narrow perspective, this theory is about

multi-dimensional interactions within all levels

of actors. At the same time, it does not only

focus on developing a given technology but also

considers the socio and cultural aspects of the

development (Ibid.). The MLP is a method,

which identifies and enhances the core

elements in transition; stability and change. A

5 Red-thread are the core elements structuring the

content of the report

Page 22 of 97

well-developed system is stable and path-

dependent, where only predictable changes in

the existing trajectories occur. Simultaneously

there are new innovations appearing as radical

alternatives to the system – not always as a

replacement to the system, but also as a

contribution. These alternatives often have a

hard time getting into the system, as they are

either: “too expensive (since they have not yet

benefited from economies of scale and learning

curves), require changes in user practices, face a

mismatch with existing regulations, or lack an

appropriate infrastructure“ (Ibid.). The

transition and interplay of actors happens in

different layers. These layers are defined as;

Landscape, Regime and Niche (Ibid.).

4.3.2 The Socio-Technical Landscape The landscape is the broad context of the

system, and is divided into two parts, namely

the literal landscape and the metaphorical

landscape. The literal landscape contains the

actual landscape as it is, the landscape we can

travel through, the nature, the environment

and the weather conditions, where the

metaphorical landscape is the world we are a

part of and sustains us, including political

ideologies, societal values, beliefs, concerns,

media and the macro-economic trends (Ibid.). It

is in other words the greatest degree of

structure, which can be influenced, but not be

controlled by single actors.

4.3.3 The Socio-Technical Regime The regime is the existing socio-technical

system with the structural rules that coordinate

and guide the actors within it. It is an alignment

of technologies, regulations, user patterns,

infrastructures and cultural discourses (Ibid.). As

mentioned this is the stable system consisting

of lock-in mechanisms and path-dependency,

and change in the regime is relatively

predictable in certain directions. These can for

example be shared beliefs, consumer lifestyles,

regulations, laws, infrastructure and low costs,

that make actors blind to development and

opportunities outside their scope (Ibid.). It is

therefore, as mentioned, not only the engineers

and the manufactures that the regime

comprises – as it is a tendency to believe in

other innovation studies – but a vast spectrum

of actors from policy makers to consumer end-

users (Ibid.). The regime represents the deep-

structural organisation behind a system. Geel

describes it as: “While the notion of socio-

technical ‘system’ refers to tangible and

measurable elements (such as artefacts, market

shares, infrastructure, regulations, consumption

patterns, public opinion), the notion of ‘regimes’

refer to more intangible rules on which actors

draw in concrete actions” (Ibid.).

4.3.4 Niche The niches are the novelties or the new

innovations that radically deviate from the

existing regime, as outcomes from R&D

laboratories, subsidized demonstration

products or small-market niches, where users

have special demands (Ibid.). These novelties

are crucial to transition as they are the starting

point of a system change. They seek to be used

in the regime or even replace it, but it is not

easy to be merged into the existing regime, due

to the mentioned lock-in mechanisms (Ibid.).

Geel describes three social processes that give

niches momentum to merge into the regime

(Ibid.):

Learning processes on various dimensions;

about imperfections of technology and how

they may be overcome, issues of

organisation, market demand, user

behaviour, infrastructure requirements,

policy instruments and symbolic meanings.

Page 23 of 97

Figure 11 The hierarchy of the levels in MLP

The articulation (and adjustment) of

expectations or visions, which on the one

hand provide guidance and direction to the

internal innovation activities, and on the

other hand aim to attract attention and

funding from external actors.

The building of social networks and the

enrolment of more actors, which expand

the social and resource base of niche-

innovations

4.3.5 Temporal multi-level dynamics The last part of the theory are the dynamics

happening through the

levels. Here is a term

called windows of

opportunity pivotal.

The transition happens

when a niche

innovation is utilized in

the regime, but to be

so the regime must be

destabilized. As seen

on Figure 11 both the

build-up in momentum

from the niche level

can influence the

regime, and the

landscape conditions

can put pressure on the regime and either

enable or prevent the niches from merging into

the system (Ibid.). These windows of

opportunities can also be seen as transition

pathways, where Geels has identified four

pathways (Ibid.):

1. Technological substitution, in which

niche innovations emerge and replace

existing regimes

2. Reconfiguration, in which niche-

innovations are adopted into the

existing system/regime, and

subsequently lead to changes in the

system architecture

3. Transformation, in which incumbent

actors change regime elements (beliefs,

search heuristics, investment patterns,

regulations etc.) to solve problems and

accommodate external pressures

4. De-alignment and re-alignment, in

which strong landscape changes lead to

regime breakdown (de-alignment),

followed by a prolonged period of

niche-experimentation with multiple

novelties, and gradual re-alignment

around a ‘winner’.

4.3.2 Phronetic research

Phronesis is often translated as practical

wisdom, practical judgement or common sense.

It goes beyond analytical scientific knowledge

(episteme) it focuses more on the “art of

judgement” and asks the unavoidable question

of power and relations of power in planning

(Flyvbjerg, Aalborg University 2008). A central

task of phronetic planning research is to provide

examples of the ways power and values work in

planning and to shed a light on who is affected

by decision-making. As well as phronetic

planning research reveals how relations of

Page 24 of 97

power and values could be modified in order to

change consequences for those affected by

planning decisions (ibid.). Phronesis entails

contact between the general and the concrete

(Ruderman 1997).

In this project phronetic planning is used for the

policy analysis, to determine what the regime is

pointing towards, which actors are actually in

play and whether this approach is desirable in

the context of the research question.

Eventually, the authors ask the question what

could be done about this regime, setting the

tone for niches and windows of opportunity to

be identified. The goal is to provide concrete

examples and detailed narratives of the ways in

which power and values work, to get as clear a

picture of the system in which the niche could

operate.

The principal task for phronetic research is to

clarify values, interests and power relation

(Flyvbjerg, Phronetic Planning Research:

Theoretical and Methodological Reflections

2004). The point of departure for such research

can be summarized in four important questions.

In this project, the questions are used as a

conclusion to the research on Uganda´s

electricity regime. The questions are:

1. Where are we going with planning?

2. Who gains and who loses, and by what

mechanisms of power?

3. Is this development desirable?

4. What if anything should, we do about

it?

The phronetic research conducted in this report

is used to reveal the path policy makers, on

national level, are pursuing. The perception the

authors have of the regime, as is clarified within

the MLP theory, is a significant factor of

phronetic planning. Thus, it is important to keep

in mind that the phronetic planning research

questions take into account both the “we” (the

researchers) and the “they” (The Government

of Uganda or policy makers). Planning

researchers who ask these four questions use

their studies to understand or predict where

things may be going next and what, if anything,

to do about the direction it is heading (ibid.). It

can therefore be combined with the MLP to

verify that the development or the existing

socio-technical regime is not desirable.

Bent Flyvbjerg, the creator of phronetic

planning research, states in his report Phronetic

Planning Research: Theoretical and

Methodological Reflection, that: “ It should be

stressed out that no one has enough wisdom

and experience to give complete answers to the

four questions”. What Flyvbjerg means is that

the researchers do not carry the wisdom and

experience to give concrete answers, as they

are not smarter or more ethical than anyone

else (Flyvbjerg, Phronetic Planning Research:

Theoretical and Methodological Reflections

2004). What should be expected however, are

the attempts to develop answers as an input to

the ongoing dialogue concerning the problems,

possibilities and risks involved in energy

planning of Uganda and how things may be

done differently?

Phronetic planning research is problem driven.

Hence such research does not subscribe to a

certain method like discourse analysis, statistics

or qualitative methods, even though these

methods may prove relevant in a specific piece

of research in order to address the specific

problems at hand. It is impossible to be truly

problem driven and at the same time

committed to a certain method, by doing so the

researchers are limiting themselves to one

method and therefore limiting its ability to

address the problem at hand (ibid.). To

summarize the above, the purpose of phronetic

Page 25 of 97

Figure 12 Theoretical approach of MLP

social science is not

to conduct a theory.

The purpose is rather

to contribute to the

practical rationality

of the society and

clarifying, where we

are, where we want

to go, and what is

“appropriate”

according to various

sets of values and

interests (Flyvbjerg,

Aalborg University

2008). The authors

of the report choose

to amplify the four-

phronetic questions to form a general

understanding of where the Ugandan

government seems to be heading with their

energy plans and policies. It is also important to

have some reasoning for looking into

governmental policies, to get an understanding

of their purpose and to formulate an outcome.

4.4 Theoretical Approach

4.4.1 MLP

The theoretical approach in this report

emphasises on the theory of Multi-Level

Perspective, as this has been identified to best

represent the different aspects to which the

project extends. The landscape, on the largest

scale extending globally, scales down to the

household level and represents the physical and

metaphorical (political) situation concerning

electricity. On global level, this concerns the

trends from global politics whereas the

landscape on household level elaborates on the

concerns and physical situation of inhabitants.

The chapter introduction describes this

landscape. On itself, and according to the

theory of MLP, the landscape influences the

regime that governs the electricity sector. The

regime represents the system of rules that

guide the actors within it, and it the case of this

project represents how the government, the

private sector and donors are collaborating to

achieve their goals. MLP helps defining this

regime, and helps in understanding why

electrification in Uganda is approached as it is

currently. The regime is defined in the actors

and policy analysis.

This project aims to come up with new ideas

that could potentially flourish within the regime

and landscape and lead up to a better approach

of rural electrification. The theory of MLP

accounts for this in the form of technological

niches, which allow the authors to identify new

technologies that are not yet adopted within

the landscape. Research in different solar

novelties and technologies is done to come up

with a suitable technology. The technology is

validated by an economic analysis on

implementation in households, showing the

feasibility of the technology for different

Page 26 of 97

income levels. The niche is then then, according

to the MLP, introduced through windows of

opportunity that are existent within the regime,

or suggested in the form of social processes,

that give the niche momentum to emerge

within the landscape. An analysis of the solar

market, as this project focusses on the

utilization of solar potential, extends the regime

analysis for these windows and processes to be

discovered. The approach of the theory is

shown in Figure 12.

4.5 Project Structure/Delimitations

4.5.1 Map of Research Pathway

The Phronetic research tool helps analyze the

power and values within the Uganda energy

system while the MLP provides a theoretical

framework for perceiving the system’s

landscape, regime, and niche opportunities.

This section describes the map of research

pathway, explaining which topics are relevant

to this paper and which topics are linked but

not a focus of research.

Figure 13 presents the pathway where topics

highlighted in yellow represent research focal

points and those in grey reflect topics which are

pertinent but are research delimits.

Uganda Overall Energy Systems Any nation’s energy system can refer to

multiple sub-sectors of energy. In the case of

Uganda, the overall energy system includes

electricity use, energy used in transportation,

fuels used for heating such as petroleum,

fuelwood and charcoal derived from Uganda’s

forests – generally used for cooking, and

potentially other areas of the energy sector not

mentioned here. In part because of a general

interest and the recognition that electricity is a

requirement for achieving modern energy

services, the authors of this paper choose to

explore Uganda’s electricity system.

Urban v. Rural Electrification Within Uganda’s electricity system are two

separate but overlapping spheres of

electrification: urban and rural. Within the

urban context, the electricity grid is

experiencing challenges in its capacity and

reliability as millions of people move to cities

such as Kampala or Gulu every year (Uganda

Bureau of Statistics 2014). In some cases, urban

settlements are expanding faster than grid

construction (New Vision 2012). In other cases,

many of the nearly 60% of urban dwellers

whom lack adequate access to grid electricity

suffer the inability to afford the price of

electricity (Murengezi 2013). Despite such

rapid growth in urban areas, approximately 85%

of the current population still lives in rural

villages, 90% of which suffer acute energy

poverty (from introduction). According to a

socio-economic study comparing solar off-grid,

on grid and un-electrified households, “One of

the rationales for rural electrification is that it

enables households to switch from lower-quality

fuels to electricity for various energy services. It

is expected that this switch will generate a

range of social, environmental and economic

benefits.” (Njeri Wamukonyaa 2001). Assumed

could be that rural electrification renders

migration unnecessary. The same report states

that “Many governments have perceived rural

electrification as part of the solution to the

problems of urban migration (…). The

underlying assumption is that electrification

would trigger the development of rural areas,

thus rendering migration unnecessary” (ibid.)

however, their investigation showed that

electrification in rural areas did not lead to this

effect. Even so, rural electrification deserves a

great deal of attention and from this point

forward urban electrification is not discussed

further.

Page 27 of 97

On-Grid v. Off-Grid There are two main approaches toward

electrifying rural areas in Uganda: 1) adding

people to the national electricity grid through

interconnection and grid-extension (on-grid), or

2) creating off-grid (stand-alone) or micro-grid

solutions, which are separate from the national

grid. Depending on the conditions of the rural

area, off-grid solutions are the most

appropriate (Ministry of Finance, Planning and

Economic Development 2014). The on-grid

approach relies mainly on generation capacity

from large hydropower facilities. National policy

places a great deal of emphasis on extending

the grid to rural villages because access to the

national grid, assuming it is stable, is ideal for

the efficient delivery of electricity in Uganda

(Piggins 2014). However, under this approach

poor rural citizens living in remote villages still

lack physical and affordable access to electricity

because the cost of grid extension is prohibitive

and rural incomes may be too low to afford the

electricity (Ministry of Finance, Planning and

Economic Development 2014). Off-grid

electrification focuses on establishing home

solutions or local mini-grids, which generate

and distribute electricity to households and

institutions (ADA 2015). This paper will focus

on off-grid/mini-grid electrification solutions.

Electrifying Households Among rural villages, there is a myriad of

demands for electricity, including among local

enterprises such as small businesses and

institutions such as schools and medical

centres. The authors of this paper acknowledge

the opportunity and challenges among a

number of electrification goals; however, the

authors choose to consider only the needs of

households with regard to electrification.

Through the problems identified in the problem

formulation section, it is apparent that by

electrifying the household there is potential to

address a handful of interconnecting problems,

mostly to do with poverty.

Solar Energy As described in the introduction, Uganda

receives ample sunlight, which can be used to

generate electricity. Uganda also has a

topography suitable for other forms of energy

generation including micro-hydro power (GIZ

2009). The decision to research solar is linked to

the excitement surrounding the opportunity for

solar energy to greatly impact the future of

Uganda’s (and Sub-Sarah Africa in general)

energy mix (Thomas 2015).

Swarm Electrification A number of ‘niche’ technologies exists within

the solar energy context in Uganda. The authors

of this paper consider two niches in particular,

1) swarm electrification and 2) the anchor-

based (or asset-based) model. Both niches offer

an intriguing perspective on coordinating and

activating opportunities for solar energy.

Page 28 of 97

Figure 13 Map of Research Path

Page 29 of 97

4.6 Limitations

4.6.1 Research

The limitation chapter is of great importance in

this project, as the project in general is

approached by this pathway up the

metaphorical foggy mountain. When going

through the pathway described above,

limitations did occur.

The intention for the project was to go to

Uganda to get on-the-ground and real-life

impressions of the local society. Even after a

great effort in fund-raising through Danish

funds and networking with several agencies in

Denmark and Uganda, this hasn’t been possible

for us. This preparation of the project is thus

mainly based on the Internet and what people

have written there about the topic. By going to

Uganda this manner would have been reduced,

as it had been possible to talk to the local

people and listen to their needs and their

perspective of the topic. An essential part of the

transition, implementation of Solar PV and the

MLP is the cultural behavior and traditions. It is

far from optimal to read about this, to be there

on the ground and feel the local atmosphere

could have given another, more realistic,

dimension to the report.

But as this wasn’t possible, the next best

approach was interviews through Skype from

our network in Uganda. Here it has been

explored the reality of, why the Ugandans need

better, reliable, electricity. The connection has

been very unstable and achieving a whole

conversation has not been obtained without

several connection breakdowns, combined with

low-visualization and inaudible-sound barriers

throughout the meetings. This experience has

though been with our supporting network. To

get in contact with other actors in Uganda has

been an even harder challenge. Getting

information out of the government parties and

private companies has been limited. The group

has tried calling several major actors several

times without luck and is hence a limitation for

gathering relevant information directly from the

sources. Thus another point hindering the full

potential and ability to research the topic.

This barrier didn’t impede the motivation for

doing the project, but was contrary encouraging

to enlighten the topic even more.

Page 30 of 97

5.0 Electricity Policy and

Governance Analysis As indicated in the method chapter this chapter

is a part of the regime and thus aims to

understand the regime of the energy sector in

Uganda. It answers the following sub question:

What is the electricity regime for (rural)

electrification and what actors are in play?

This is done by identifying actors, the legal

framework considering electricity and by giving

a detailed overview of the governmental plans

and strategies when it comes to electrification

(Appendix 1). At the same time, in this chapter

the Phronetic Planning Theory is utilized to

analyze the policies that affect rural, off-grid,

solar solutions and the power relations within

the different actors. Methodology of Phronetic

Planning requires the answering of the

following core questions:

1. Where are we going with planning?

2. Who gains and who loses, and by what

mechanisms of power?

3. Is this development desirable?

4. What should we do about it?

The methodology chapter elaborates on the

validity and adequate use of this method in the

context of the current policy framework.

The key aspects of the analysis are put into

Table 1. Due to the difficulty defining the

correct documents to look into (foggy

mountain), the analysis is an extensive

compilation of legal documents that is lengthy

to read. The review of the documents are

shown in Appendix 1, the appendix elaborates

in depth how the electricity regime in Uganda is

constructed. The most important key points and

findings and the analysis discussion are stated

in this chapter.

5.1 Findings

As seen in Appendix 1 (Chapter 1.3 Actor

Identification) there is a variety of actors with

different values and different mechanisms of

power. The main actors, who have the biggest

influence in the current electricity regime, are

put into Table 1 hence also the actors

determining the path electricity planning is

going – the red circle is the current regime.

The current electricity regime consists of:

o Foreign- donors and investors, MEMD

(Ministry of Energy and Mineral

Development),

o REA (Rural Electrification Agency),

o ERA (Electricity Regulatory Authority)

and the

o President of Uganda (Yoweri Museveni).

The regime has failed to establish an

attractive environment for private investors

due to a lack of coordination

Energy planning in Uganda is approached

top-down

District, municipalities and consumers do not

have significant influence with in the current

electricity regime.

Large investors are being favored by the

government

Rural electrification is approach by extending

the main grid

The government pursues source and supplier

independency

Off-grid electrification is mainly reliant on

donor support.

Table 1 Electricity policy and governance analysis, key points.

Page 31 of 97

In the spirit of MLP, the actors are divided into

three different layers; global, national and local.

In the national layer the Ministry of Energy and

Mineral Development (MEMD) is the main

actor, including its semi-autonomous bodies,

the Rural Electrification Agency (REA) and the

Electricity Regulatory Authority (ERA). These are

the bodies making all of the strategies, policies,

regulation and plans in the electricity regime to

electrify Uganda with the vision of creating a

prosperous country. Next to them the president

as the head of the government has the power

to fast-track decisions and thus redirects a path.

The presidents values are deducted from the

Uganda Vision for 2040: transform Uganda from

a peasant country to a prosperous society. To

do so, Uganda has to increase its GDP by over

30 times in the next 30 years (National Planning

Authority 2013). This does not necessarily lead

to the most beneficial decisions for rural

household electrification. Instead, it is expected

that this vision is largely approached by

attracting large investors.

In the global layer foreign donors, such

as World Bank and The German-

Ugandan development cooperation

(GIZ), are in close collaboration with the

MEMD making policies and strategies

for electricity development. The World

Bank Group has as a main objective to

reduce worldwide poverty. In many of

the legal documents in which funds are

allocated, the World Bank aids with

financial support through loans and

grants. Their funds are playing a

significant role in the realisation of

much of the countries electrification

efforts. GIZ has funded solar programs

for the benefit of telecommunication

and tourism. They are thus inflicting the

electricity regime by an economical power

mechanism – beneficial for the expansion of the

access to electricity, but also forcing the regime

to move in the direction they want. Also in the

global context it has been identified that foreign

investors have influence on the path the

electricity regime is going as they come with

large capital investments. The foreign investors

are also pressuring the electricity regime by an

economic power mechanism. The difference

though lies in their values, where the foreign

donors work to serve the social prosperity and

eradicating poverty, the foreign investors’

interest, lies in the benefits from their

investment.

Another factor to be considered is the tribal

influence. The tribe culture is shrouded in mist,

due to the reasons explained in the limitation

chapter of this report. Mr. Kabbayanga, the

Mayor of Kasese in Uganda, explains the

importance of tribes, which are rooted within

each Ugandan citizen, in terms of political

Figure 14 Actors in the regime

Page 32 of 97

power. Kabbyanga tells that the head, or king,

of the most influential tribe is the most

powerful man in Uganda, even more powerful

than the president himself (Kabbayanga 2015)

.The only reference on this matter is the mayor,

so their influence should be investigated further

as it has not been mentioned anywhere in the

legal documents.

It is in this report recognized that neither the

municipalities, districts nor the consumers seem

to have a lot of influence on the decision-

making in energy and electricity planning. The

regime is thus not significantly in contact with

the end-users or the population who are

actually going to consume electricity. The

Electricity Consumer Committees (ECC), of

which the influence can also be disputed, are

hypothetically not representing the average

inhabitant of Uganda, due to the mentioned

criteria. This means that non-English speaking

Ugandans without electricity are not necessarily

heard. From the mentioned yearly REA

Statutory Agreements it is uncertain whether

Consumer Committees and inhabitants without

access to electricity have a role in this

discussion as well.

As Uganda is an democracy, it can be argued

that consumer and non-consumers do have a

voice – through elections. However,

Kabbayanga stresses that the problem is that

people are not voting for a political agenda, but

are voting for their tribe members. This leads to

clan-based politics which refrains from being

democratic.

5.2 Discussion of the findings

To answer the questions posed at the beginning

of this chapter is to cover the discussion of the

policies that affect rural, off-grid, solar solutions

and the power relations within the different

actors. The four questions were:

1. Where are we going with planning?

2. Who gains and who loses, and by what

mechanisms of power?

3. Is this development desirable?

4. What should we do about it?

To remind the reader, these discussions are

gathered from the extensive research the

authors of this report did on; actors, legal

framework, national policies and institutional

framework. These researches are kept in

Appendix 1 of this report.

5.2.1 Where are we going with planning?

Top down energy planning From the findings in the actor identification

(Appendix 1, chapter 1.3) it is determined that

electricity planning happens top-down in

Uganda. There are a limited dialogues with

consumers on the ground in the districts, let

alone the rural inhabitants without electricity.

They are somewhat represented within the

ECC’s but they are consisting out of socially high

ranked inhabitants. This approach results in a

nationwide tendency, of which the

characteristics are explained further in the

points below. Naturally, people feel unheard,

sources are being exploited inefficiently due to

top-down decisions and local electricity

initiatives have difficulties to start up. As on-

the-ground data gathering has been impossible,

the actual effects of this on the locals have not

been investigated.

Failing regime

It is seen, from the policy analysis (Appendix 1,

chapter 1.2), that there is a major focus on rural

electrification over the years. In general there

are a lot of plans and policies dealing with the

development of energy – especially

electrification – but it seems like the objectives

of the plans are hardly achieved. Because the

country is underdeveloped, the first steps in

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development are mainly education, to train

human capacity, gain more knowledge and

allow for skilled labor. Rural electrification is

therefore heavily reliant on donor support. The

government has put (too) much responsibility in

the hands of private investors, allowing for a

regime that has good intentions, but fails to

execute them. As a response, it is now an

objective to develop financial mechanisms in

the form of subsidies, tariffs, micro-loans,

recapitalizing investments to create an

attractive environment for investors to inject

capital in energy development.

Grid-extension Rural electrification is categorized into two

parts; on-grid and off-grid development. From

the policies (Appendix 1, chapter 1.2) it is clear

that the focus is mainly on on-grid solutions for

rural electrification. Grid extension is seen as

the most reliable, and therefore the best

approach to achieve nationwide electrification.

This means budgets are largely allocated

towards the generation, transmission and

distribution of electricity, and maintaining grid

stability. Whether this is the best choice for

electrifying the country, is arguable. Although

the electricity act (Appendix 1, chapter 1.1.1)

allows for the establishment of mini-grids by

allowing for local regulation and issuing licenses

only from 0,5MW, there is only a small part of

the budget for the Rural Electrification Strategy

and Plan (RESP) going to the development of

mini-grids (Appendix 1, chapter 1.2.5). The

National Planning Authority (NPA) suggests that

rural electrification should be approached by

extending the grid to district headquarters

(lbid.). Rural in this case does not consider the

scarcely populated areas, where distribution

and transmission networks are not easily

accessible. The budget of the NPA shows that

only 3% is allocated towards rural

electrification, which in this case means,

towards the distribution grids, financial

mechanisms and institutional improvement

(lbid.). This budget is insignificant compared to

the budget allocated towards the development

of large power plants (lbid.). This leads to

thinking that the government is not concerned

with providing rural access, but is more focusing

on attracting foreign investors. It is stated in a

scientific report about global policies on rural

electrification that off-grid solutions should be

pursued when on-grid proves to be not feasible

(F.S. Javadia 2013).

Source diversity In terms of renewable resources, the objectives

considering source diversity to have source

independency are ambitious, as some of the

plans focus mostly on gasification of biomass,

some on solar home solutions and some on

small hydro (Appendix 1). The newest plans

seek to achieve the off-grid development on

solar PV systems and mini-grids (lbid.). As

mentioned in the chapter ‘Introduction’, there

is an installed hydropower capacity of 692 MW

and 130 MW of renewable electricity from

other sources as of 2012. Compared to the

Renewable Energy Policy (RE Policy), the total

amount differs about 20% (the target being 970

MW and the result being 822 MW), where the

amount of other sources differs less than 10%

(130 MW instead of the expected 140 MW)

(Appendix 1, chapter 1.2.4). This does not

include the difference between installed

capacity and actual effective capacity, due to

reasons as drought. It seems thusly that they

are realizing their goals when it comes to

sustainable source diversity, but it is disputable

whether the capacity goals are ambitious ones.

From the policy analysis it is not entirely clear

what the entire capacity on solar power

upholds, but according to the Rural

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Electrification Strategy and Plan (RESP) from

2012 the total amount of off-grid serviced

consumers is 180.000 as of 2012 (Appendix 1,

chapter 1.2.6). The only off-grid capacity goal

set by the RE Policy is a 700 kWp6 capacity of

solar home systems (Appendix 1, chapter 1.2.4),

which equals to approximately a 7.000 to

70.000 households equipped with solar panels,

considering product data from one of Uganda’s

solar panel supplier, BBOXX (BBOXX 2015) what

extend this corresponds to the later-defined

amount of services consumers is unclear. There

are currently running projects for the

installment of on-grid solar plants (Utilities ME

Staff 2014), but these are not in operation yet.

Distributed generation It appears that from the objectives in the RE

Policy a focus towards more distributed

generation of electricity is pursued, in order to

avoid supplier dependence (Appendix 1,

chapter 1.2.4).Supplier dependence leads to

increased grid instability. It is not visible what

this entails and leads towards, as there are no

targets on the prospected amount of power

plants. A look into the broad range of smaller

scale (hydro)power stations that are planned

for construction throughout the country, shows

that there is indeed a focus on distributed

generation, as compared to the existing ‘large’

hydropower plants, multiple smaller

(approximately <10MW) plants are being

constructed (Wikipedia 2015). This source is

considered reliable in this case as the source for

each planned power plant is a news article

confirming its construction.

6 Kilo Watt Peak, a unit used for measuring the

capacity of a PV panel. It represents the maximum

output of the panel independent of the weather

conditions.

Local participation From the RESP and the RE Policy from 2007, a

clear tendency towards creating awareness to

enhance local participation becomes apparent

(Appendix 1, chapter 1.2). By handing

responsibilities towards local governments,

local coordination of projects is stimulated to

create more widespread generation of

electricity. This does not imply that there is a

tendency to actually give voice to people

without current access, or even consumers.

From the actor identification it became

apparent that there are some initiatives from

volunteer groups who are concerned with

sustainable energy planning, but to what extend

these resources are being utilized is not clear

(Appendix 1, chapter 1.3) .

Donors As seen in Electrification for Rural

Transformation (ERT) Phase III (Appendix 1,

chapter 1.2.3), there is a large reliance on donor

funding when it comes to financing rural

projects other than on grid, suggesting that the

government is `pulling out’. Off-grid

mechanisms, such as tax exemptions and

subsidies, are largely supported by donors

(lbid.).

5.2.2 Who gains and who loses, and by what

mechanisms of power?

Where the electricity sector before has been a

centralized, bureaucratic regulated system, it

seems in the ERT phase 3 that the REA is

monitoring most of the plans as all donors

funding is being funneled through them (lbid.).

However this happens more and more in

dialogue with the local governments as much

focus is on decentralizing the decision making

power. Medard Muganzi, ERA Manager Energy

for Rural Transformation, says that the

development needs to be public-sector-led

opposed to the before pursued private-sector-

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led investment, as the private sector mainly

looks at a financial return (Dunbar 2013). The

rural electrification strategy and plan states that

as of 2012, “The current RE program is being

implemented in a disaggregated manner with

many players acting in overlapping and

insufficiently coordinated roles” (Appendix 1,

chapter 1.2.6). In the past, the private sector

was given the responsibility of leading the

market, but the incentive still remained at the

government who did not supply with the

adequate financial and regulate frameworks to

operate within. This has been acknowledged,

and was set to change from that point forward.

From phase III of the Energy for Rural

Transformation document it is deducted that

especially for renewable energy off-grid rural

incentives, donor support is leading, confirming

the changes in power from private led to donor-

through-government led (Appendix 1, chapter

1.2.3). This decreases the influence of the larger

private investors, but possibly enhances the

position of smaller ones as incentives for them

are created to invest. It can be argued that as

more funds are being allocated towards

facilitating these local organizational

institutions, naturally less becomes available for

the support of the larger, central power plants.

Although not deductible from the legal

documents, the power of the President himself

as considered in the actor identification, mainly

exerted by fast-tracking decisions and media

appearances is a large factor to be reckoned

and while probably not being a constant

presence, it is a significant one (Appendix 1,

chapter 1.3). Being largely interested with

economic growth, the president is concerned

with attracting large economic capital. Quite

recently, in 2013, Chinese investors have been

attracted to fund a 600 MW and a 188 MW

hydro power station, on concession basis7.

While cheap credit from China is the reason for

these developments (New Vision 2013), it might

bring large central power producers, but

decreases interest for the smaller foreign

investors as they are demotivated due to longer

bureaucratic processes.

As the largest donor for rural electrification, The

World Bank, their influence in the ERT program

is significant (Appendix 1, chapter 1.2.3).

Without their support, enormous amounts of

funding partially allocated towards a subsidy

mechanism for Solar PV, would cease to exist .

The impact of such a pull-out could not be

grasped but as the government focuses on on-

grid extension by creating possibilities for

private investments, basically the whole off-grid

program is left for donors, functioning more or

less like a back-up. Should the government keep

focus on on-grid electrification and leave off-

grid entirely for donors, eventually the

population living in the most rural areas are the

dupe of this tendency. For these people, it

could take a long time before electricity reaches

them. Government does however, acknowledge

their dependence on donors. A word from the

ERA Executive Director, Godfrey Turyahikayo,

saying: “Without donor support, we wouldn’t

have been able to do even a tenth of what we

have done so far. Everything we have done so

far has been as a result of the either the donors

or targeted financing from the energy fund”

(Dunbar 2013).

There is potentially also a lot to be gained by

rural households if the intentions of the

7 A concession in this case resembles a contract

established between the national utilities and a

private investor

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government to motivate local participation are

being pursued. If training and education is being

offered, as well as institutions that provide with

financial means to set up micro utilities, this

could lead to the emergence of mini grids. On

the longer term mini grids can potentially be

connected to the main grid, on the short term

they can lead to electrification in the most rural

areas. Communities can benefit from this

tendency by pushing forward local

entrepreneurs that are willing to set up such

businesses.

5.2.3 Is this development desirable?

According to the documents in Appendix 1,

there is a shift of power from centralized

government towards local decision makers

guided by donor and private support. For rural

electrification in general this proves to be a

desirable situation as there is more capacity to

create incentives for municipalities,

communities, or individuals to set up a

framework in which rural projects could

flourish. The fact that this tendency is

government-driven means that it is on the

political agenda, making it generally easier for

electrification projects to be approved and

implemented. It is expected that an increase in

budget allocated towards rural electrification by

the government, specifically in institutional

improvements that allow for easier on- and off-

grid implementation or financial mechanisms

that allow for cheaper on-grid access, leads

toward a higher electrification rate as a wider

public is reached.

However, even with training and access to

credit it could be difficult for local

entrepreneurs to start up off-grid projects, and

currently the demand-side mechanisms that are

maintained are largely driven by donors, such as

subsidies. Should these programs end there is

no demand side incentive other than the tax

exemptions on solar components. If in addition

to this government maintains the tendency to

fast-track large investors to gain foreign capital,

they go into their own ambitions – and then the

development can be considered not desirable.

Clearly, the focus is mainly on on-grid

applications, while the largest investors are

being favored by government. Grid extension

takes time, and within this development, most

rural households, also households with

reasonable capital that could set up projects in

more demand-side-supported environments

have to wait before they can get connected to

the grid.

5.2.4 What can we do about it?

This question is rather inflated, as there should

be no illusion that the authors efforts result in

regime changes. Ideally, on-the-ground data

would have been gathered at this point to

analyze the actual situation experienced by

rural inhabitants themselves and compared to

the made analysis. Due to the limitations of the

metaphorical foggy mountain, this has not been

possible. Instead, the authors defined a

different pathway through the MLP that could

be approached by desk research:

The next step is pointing out potential windows

of opportunity for niches to emerge within the

existing regime, that could be beneficial for

rural households in terms of increasing

electrification. Should these windows be

existent and utilized this could lead to a change

in the landscape and the regime. The windows

can only be descriptive, as no implementation

data has been acquired.

As this projects’ approach for electrifying rural

households considers the utilization of solar

potential, the intention is to identify niches and

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windows with this focus. In order to do so, a

closer look into the Ugandan market especially

for solar solutions has been deemed necessary.

The next chapter gives a description of the

existing segments of solar solutions within the

solar market, and analyses this market

concerning the supporting mechanisms from

the government, donors and the private sector.

Furthermore, a business case for the

implementation of off-grid Solar Home Systems

(SHS) is made in order to understand the

viability of such a purchase within the current

regime. This is done to determine what

households have the ability to afford such a

solution, whether this could lead to large scale

rural electrification and whether suggestions for

additional support mechanisms are needed.

A potential niche is identified by analyzing

implementation models for SHS in Bangladesh,

a leading country when it comes to rapid SHS

growth in rural areas (Palit 2013). These models

are elaborated upon in the chapter 0.

Finally, with the windows of opportunity

identified it is possible to determine

suggestions that enlarge the window of

opportunity. These suggestions are determined

through the analyses of the actors, policies and

legal framework in the form of institutional

changes, and through the outcome of the

business model in the form of (financial)

support mechanisms,

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6.0 The solar market In order to identify niches and windows of

opportunity for Solar PV to be implemented to

benefit households in rural Uganda, it is

necessary to analyse the

functioning of different

segments and how they are

supported in the solar

market, which is done in this

chapter. By doing so it

answers the following sub

question: What solar

solutions are available and

how are they being

implemented in the current

regime?

6.1 Solar PV market

segments When it comes to solar

electrification, there are six

segments to identify. Of

these six segments shown

below in Table 2, only the

Solar Home Systems will be

discussed in technological

detail. Pico-systems are,

though individual, within the

reach of households and

therefor expected to

increase electrification and socio-economic

benefits. However, the market for these

products is considerably different from the

market for other solar implementations, which

is based on solid systems and is driven by

government, donors and the private sector

(Ulrich Elmer Hansen 2015). The

telecommunications and tourism segment, the

hybrid (diesel-PV) mini-grids and grid-connected

solar solutions are only elaborated upon in the

context of the market, but not in technological

detail as they extend above the focus group of

households. They make up part of the solar

market, and implementation of them is leading

towards more electrification in the country,

however they require private organisations or

utilities to be involved and this report do not

have that in its scope. The small Stand-alone

institutional PV-systems are expected to lead to

socio-economic benefits for households as they

are often procured for schools, health clinics,

and hospitals. The technologies used within this

segments are strongly resembling SHS, however

they differ mainly in electricity capacity,

government- and donor support. (Ulrich Elmer

Hansen 2015)

Market segments Market characteristics Installed capacity/size Owners and buyers

Small pico-systems:

solar lanterns, LED

lamps, solar

chargers

Lighting and charging of

batteries and mobile

phones in mainly non-

electrified areas

1–10 Wp Private (over the

counter) consumer

devices

Solar home systems

(SHS)

Off-grid electricity

demand in private

homes in dispersed

settlements, in smaller

non-electrified villages

and on the outskirts of

electrified towns and

villages far from existing

distribution lines

10–100 Wp Residential SHS

(private households),

Stand-alone

‘institutional PV

systems’

Institutions located in

villages without grid or

mini-grid, or on the

outskirts of grid-

electrified villages

50–500 Wp Government/municipal

procurement for public

institutions (schools,

hospitals, health

clinics)

Telecommunications

and tourism

Powering telecom base

receiver stations (BTS),

link sites, and remote

tele-centres, and basic

electricity supply

(mainly lighting) for

rural lodges and hotels

0.2–15 kWp Procurement by

commercial companies

in the telecom and

tourism sectors (e.g.

telecom service

providers, hotel

owners, etc.)

Mini-grids (e.g.

hybrid PV-diesel)

Villages and towns

located far from existing

grid

5 kW-1 MWp Utilities, cooperatives

(community-based),

ESCOs (village

electrification projects)

Large-scale, grid-

connected PV

systems

Expansion of production

capacity in existing grid

1–50 MWp Utilities, IPPs (incl.

foreign investors)

Table 2 Six segments on Solar PV

Page 39 of 97

Solar Home Systems (SHS) are basically sold as

over-the-counter products. They need to be

installed by technicians and need to be

serviced. The technology is comparable to air

conditioning. (Ulrich Elmer Hansen 2015). SHS

are therefore considered being solid systems,

resulting in ‘electrification’ of a household when

implemented. A typical system includes a PV

panel from 10Wp to 100Wp, a rechargeable

battery, a few LED lamps and a port for a

television (usually black and white) or radio (or

other low power consuming appliances) (Ulrich

Elmer Hansen 2015) (Palit 2013). According to a

survey conducted in Kasese district, this

package covers the primary demands for

standard households, and it is hence assumed

the case for the rest of the country.

Compared to SHS, the institutional PV segment

is larger both in size and capital intensity. Also

there are more instruments used to support

and promote this segment. Often these systems

are being implemented by donors or by

government, allowing for direct support. These

solutions mainly provide electricity for schools

or public buildings in rural areas far from the

grid (Ulrich Elmer Hansen 2015).

Telecommunication and tourism, a segment

largely controlled by private and commercial

actors, is a segment in which government and

donor support is limited because it is market-

based. Support limits to broad enabling

incentives, including VAT and duty exemptions

for (importing) PV materials (ibid).

6.2 Solar market & regime

The total solar PV capacity as of 2009 (most

recent sources) is estimated at 1,1 MWp, with

annual sales of about 200kW. Compared to

surrounding countries Kenya and Tanzania, the

share of SHS systems within this market was

low (with about 20% in Ugnada against 80% in

Kenya and Tanzania). It has been reported that

this share is increasing substantially over the

last five years, with SolarNow stating there are

about 45.000 systems as of 2014 where there

were around 20.000 SHS in 2007 and 30.000 in

2012 (ibid.)

The institutional segment made up the main

part of the solar sector, with about 470 kWp, or

45%, in 2009. These implementations were

mainly found in healthcare systems, educational

facilities and governmental sectors.

Telecommunications and tourism took up the

remaining 35% of installed capacity. It is

expected that the telecommunications and

tourism segment will increase (ibid.)

Governmental and donor support of SHS in

Uganda has been executed by both direct and

indirect measures, comprising of providing

subsidies and exemptions from import duties

and VAT on PV materials respectively.

The Photo Voltaic Target Market Area (PVTMA)

is a subsidy for the end user, commercial,

industry and private consumer

households. The subsidy varies depending on

whom is receiving it.

For industry and commercial use, it is 4

USD per Watt peak of the PV to a maximum of

500 Watt peak. For private consumer

households 5.50 USD pr. Watt peak to a

maximum of 50 Watt peak. The household,

industry or commercial needs to be at least

100m from the existing grid and installed by a

REA approved solar provider before the PV

system are eligible for the subsidy. (Piggins

2014)

To be able to monitor the subsidy the REA gives

it to the financial institution that the consumer

are using to finance the purchase of the PV

system, then the financial institution purchase

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the PV system from a PV supply company. If a

loan is not needed, the PV company will receive

the subsidy after the sale of the PV system.

(Piggins 2014)

The direct subsidy was being made possible by

help of the World Bank, within the before

mentioned ERT program and implemented by

the REA (ibid.). This ERT-program also aimed at

stimulating the SHS segment by reducing end-

used costs through micro-financing institutes,

by providing business start-up support and

technical training to suppliers. However, the

initially 80.000 planned SHS installations were

never reached and only 7000 were installed at

the end of this phase. Recently the ERT program

has been extended at least until 2016, with

reasons unknown (Rural Electrification Agency

2014).

Worth mentioning is that the RESP plan

analysed in the policy analysis mainly prioritizes

rural electrification by supporting the

implementation of PV-powered mini-grids. As

stated they plan to reach about 130.000

additional utility owned off-grid installations as

of 2022. From the policy analysis in appendix 1

and as well as the review on the solar market

used for this overview, it is not clear how this

target is exactly going to be met.

As well as the demand side, the supply side of

the SHS market segment is supported through

German Technical Cooperation (GTZ) with rural

area offices, local solar dealers and supplying

micro finance (Ulrich Elmer Hansen 2015).

Two trends are identified concerning the solar

market in Uganda.

First, there is a tendency towards market

driven, commercial development within the

solar market. With solar becoming more and

more a feasible alternative for both consumers

and investors, not only the SHS segment

increased its share in total capacity but

investors are playing a more significant role in

the segments of telecom as well (ibid.). This

connects to the words of the Mayor of Kasese,

stating that Ugandans are these days not

holding up their hands as much, but are more

willing to engage in business like projects with

investments and ownership (Kabbayanga 2015).

The government tends to create a conducive

environment that encourages investments and

trade in the solar market so to enhance the

emergence of mini-grids and on-grid

implementations of solar power (Ulrich Elmer

Hansen 2015). Although the off-grid solutions

segment is seen to be increasing, this is mainly

expected to be the cause of growing household

expenditure and demand and not so much due

to government support(ibid). This is in line with

a news article confirming the construction of

500 MW on-grid and mini-grid solar power

plants (Brown 2013). The policy analysis

confirms a parallel tendency, stating that the

overall electrification focus by the government

is more towards on-grid rural electrification

concerning the entire electricity sector.

Secondly, there is a large dependency on donor

support to develop the uptake on solar PV.

Especially in the institutional PV segment, donor

programs have been rolled out that directly and

indirectly promote the use of solar PV (Ulrich

Elmer Hansen 2015). This tendency also

contributes to the before mentioned conducive

environment for private investors to be

attracted (ibid.)

According to a statement from the Renewable

Energy Investment Guide issued in 2012, actors

have been expecting continuously that the price

of solar modules would reduce over time so it

would naturally compete with conventional

energy solutions (Ministry of Energy and

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Mineral Development 2012 (B)). Even though

prices of solar panels dropped over the years,

they are still relatively high. Despite (perhaps

still inadequate) government and donor

support, the share of SHS in the current market

remains low. According to a report concerning

opportunities in decreasing PV costs in Africa it

is said that ‘the price of equipment is perhaps

the single most important factor in the growth

of solar markets in Africa’ (M. Moner-Girona

2006). It is just stated that donor support has

been the main driver for the uptake in the PV

market– but most support has been in the

institutional segment, not necessarily in the SHS

segment (Ulrich Elmer Hansen 2015).

Government support has been particularly

important for the diffusion of PV in all segments

because of the implementation of policies that

attract and motivate investors (ibid.).

As a final note, there is a tendency that could be

learned from, in neighbouring country Kenya.

Kenya experienced a growth in the

consumption of SHS as there was a growing

middle class, which led to an increase in

electricity demand for televisions, radios, etc.

As this middle class lacked the confidence that

the grid would be extended towards them, the

demand for individual systems grew (ibid.). This

gives reason to believe that with growing

household income, there is a growing demand

for SHS as well.

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7.0 Business case As identified in previous chapters, there is a gap

between the current utilization of solar home

solutions (SHS) and its potential in Uganda

(Kyezira 2009). President Museveni claims that

the unit cost of solar is still too high to be a

solution (The State House of Uganda 2014).

Although the government supports SHS with

the PVTMA subsidy, the upfront costs are still

unaffordable for rural households thus

requiring additional financing options. Solar

companies and micro-lending institutions may

offer suitable financing alternatives, which

make paying for SHS more feasible. With the

advent of mobile banking and the expansion of

savings and credit cooperative organizations

(SACCOS) in rural areas (Okwera 2015), new

options for payment and access to credit is

improving opportunities for households to

adopt SHS. The business case presented in this

chapter seeks to determine the economic

feasibility of solar home solutions through

various finance mechanisms and answers the

question: What share of rural households can

feasibly afford a solar home system?

The business case considers households’

monthly expenditures on kerosene and mobile

phone charging and compares them with the

upfront and monthly cost of adopting a SHS to

determine if there could be monthly savings

from substituting for SHS. If the cost of

kerosene and mobile phone charging is greater

than the cost of paying for a SHS, this business

case makes the claim that SHS is an

economically feasible investment.

The prices and financing plans from two

reputable solar companies and three micro

financing options serve as the basis for the

monthly cost of using a solar home system.

7.1 Assumptions

The analysis assumes the following:

Household income data from the

Uganda National Survey 2012/2013 is

representative of current rural

household income distributions

Households cannot afford to save

money longer than one month

30 percent of household incomes are

spent on purchasing kerosene and

mobile charging

As incomes rise, so do expenditures on

kerosene and mobile phone charging

15 Watt peak (Wp) or a larger solar

home system is suitable for replacing

kerosene lighting and mobile phone

charging

A larger size SHS is preferred to a

smaller size SHS

7.2 Monthly Household Income The Uganda National Survey 2012/2013 reports

the distribution of monthly incomes across

seven categories ranging from “up to 50,000

UGX” to “over 1,000,000 UGX” shown in Table

3. This business case uses the midpoint of each

income category shown in Table 4 as income

groups.

Up to

50,000

50,000 -

100,000

100,000 -

200,000

200,000 -

300,000

300,000 -

500,000

500,000 -

1,000,0001,000,000 +

Share of

total rural

households

9.2% 14.8% 30.4% 15.8% 14.3% 10.2% 5.3%

Distribution of Monthly Income for Rural Households (UGX)

source: Uganda Bureau of Statistics 2014

Table 3 Uganda National Survey 2011/2012 Monthly Income Categories for Rural Households

Page 43 of 97

7.3 Monthly Expenditure for Kerosene

and Mobile Phone Charging

On average, a rural household in Uganda

spends approximately 30% of their monthly

household income on the purchase of kerosene

and mobile charging (TEDx N/A). This analysis

assumes that as incomes rise, so do

expenditures on kerosene and mobile charging

(Energyfordevelopment 2010). Thus 30% of

each monthly income category represents the

distribution of kerosene and mobile charging

expenditures as shown in Table 5.

Table 5 Monthly expenditure on kerosene and mobile phone charging

7.4 Costs and Financing Options for

Three Common Solar Home Solutions

There are many solar home solutions from

numerous distributers in Uganda and it is

important for SHS design to appropriately

consider the unique values and circumstances

of individual households. For the purposes of

this business case, three generic systems

available through BBOXX and Solarnow serve as

reference SHS models. Each company is

recognized for delivering high quality solar

products and services in Uganda.

BBOXX systems come with 36-months free

maintenance while SolarNow systems include

24-months of free maintenance (Solarnow

2015). Table 6 presents the specifications of

each system.

Table 6 SHS specifications

BBOXX and SolarNow offer “pay-as-you-go”

method of financing for the purchase of their

systems, which allows their customers to pay

daily, weekly or monthly increments by mobile

phone in order to access the system functions.

A SIM card embedded in the solar system gives

each solar company the ability to remotely

disable functionality if a customer misses a

payment. As soon as the customer resumes

payments, functionality is re-enabled. Once the

customer makes enough payments, the system

is permanently un-locked and the customer

then owns the system outright.

Monthly Income

(UGX)

Monthly Expense

on Kerosene and

Mobile Phone

Charging (UGX)

25,000 7,500

75,000 22,500

150,000 45,000

250,000 75,000

400,000 120,000

750,000 225,000

1,000,000 300,000

1 2 3

BBOXX 15Wp

package

BBOXX 50Wp

package

SolarNow 50Wp

package

15W solar panel 15W solar panelPower pack 50W solar

panel [3]

Four 1W LED lights Five 1W LED lights Start pack

BB17 SMART CU as

BB7 [1]

BB17 SMART CU as

BB17 [1]Three 1W LED lights

Radio RadioTechnical lifetime: 12

years

USB phone charger USB phone charger

Extension cable Two extension cable

Two splitter cables

SHS System Specifications

[1] assumed to be a battery pack

[2] assumed to be a batter pack

[3] assumed that the power pack contain a solar panel on 50W and a

25,000 75,000 150,000 250,000 400,000 750,000 1,000,000 +

Share of

total rural

households

9.2% 14.8% 30.4% 15.8% 14.3% 10.2% 5.3%

Midpoints of Monthly Income Categories for Rural Households (UGX)

Table 4 Midpoints of monthly income categories

Page 44 of 97

Table 7 shows:

[1] The size of the solar home systems used in

the business case,

[2] the company offering the system model,

[3] the total cost of the system (without any

payment plan),

[4] total cost on payment plan,

[5] the first payment required to install the

system,

[6] the pay-as-you-go monthly payments,

[7] the estimated payback time for the system.

7.4 Subsidies

The previous chapter explains the details of the

PVTMA subsidy which offers 5.5 USD per Watt

of a solar home system (up to 50 Watt peak).

The subsidy is paid to the solar company which

must be certified with the REA to qualify for

the subsidy. Of BBOXX and SolarNow, only

SolarNow is found to be certified (Rural

Electrification Agency 2010).

7.5 Micro-financial options for solar

home solutions

A revolution in micro-lending8, is making it

easier for impoverished individuals to gain the

financial means to invest in entrepreneurial

undertakings. Many micro-lending institutions

offer small loans for the purposes of investing

in solar home systems. The four banks listed in

Table 8 give loans directed towards home

8 the extension of small loans which do not require

the same level of collateral or credit that

conventional loans necessitate (Grameen Bank 2011)

improvements or “any purposes,” which are

assumed to include the purchase of a solar

home system. Their lending requirements, loan

size, interest rates and payback times are

shown below. (mftransparency 2011)

7.6 Annuity loan method

For the purposes of this business case, the

following monthly interest rates and payback

times are used to simulate a range of micro-

lending possibilities: 1.6%, 2.0%, and 2.5% and

for 48, 24, and 12 months respectively. The

annuity loan calculation defines what the

monthly net payments must be to pay back a

given principle (which, in this case, is equal to

the respective cost of either the 15Wp BBOXX,

Table 7 Company systems and financing plans

Salary Loan

Can be both gender. Must be a salaried worker. Loan size:

100,000-250,000,000 UGX. Time: 3-48 months. 18.96-

27,96% decl bal rate. Monthly payments.

Personal

Development

Loan

Can be both gender. Must be 18 or above. Loan size:

500,000-70,000,000 UGX. Time: 3-24 months. 25-30%

flat. Monthly payments or quarterly.

Salary Loan

Can be both gender. Must be 18 or above and a salaried

worker. Loan size: 100,000-10,000,000 UGX. Time: 3-24

months. 27% flat. Monthly payments.

Home

Improvement

Loan

Can be both gender. Must be 18-65, salaried worker, must

run a business and own land or house. Loan size: 100,000-

3,000,000. Time: 4-24 months. 24-60% flat. Monthly

payments.

Individual Loan

Can be both gender. Must run a business and own land or

house. Loan size: 500,000-10,000,000. Time: 6-24

months. 30% flat. Monthly payment.

Salary Loan

Can be both gender. Must be a salaried worker and be in a

specific age group. Loan size: 250,000-10,000,000. Time: 6-

12 months. 30% flat. Monthly or every 2 weeks payment.

Centenary Rural Development Bank:

Uganda Finance Trust:

Habitat for Humanity Uganda:

Hofokam Ltd

[1] [2] [3] [4] [5] [6] [7]

Watt peak Company Total Cost (UGX)Total Cost on

Credit (UGX)

First Payment

(UGX)

Monthly

Payment (UGX)

Payback Time

(Months)

15 BBOXX 1,068,750 1,155,000 75,000 30,000 36

50 BBOXX 1,757,500 1,900,000 100,000 50,000 36

50 SolarNow 1,210,000 1,510,000 340,000 65,000 18

50 SolarNow (S) 375,375 468,443 105,477 20,165 18

COMPANY SYSTEMS AND FINANCING

Table 8 Micro-lending institutions and loan specifications

Page 45 of 97

50Wp BBOXX, or 50Wp SolarNow systems) and

its interest. The payments and interest rates are

on a monthly basis.

The annuity loan equation:

𝑁𝑃 = 𝑆𝑜𝐿 ∗𝑖/100

1 − (1 +𝑖

100))−𝑛

Where:

NP: Monthly net payment

SoL: The size of the loan

I: The interest rate

N: The time span in months

For example, the monthly net payment for

1,068,750 UGX loan (required to purchase a

15Wp BBOXX system) at a monthly interest rate

of 1.6%, paid over 48 months equals 31,933

UGX:

𝑁𝑃 = 1,068,750 ∗

1.6100

1 − (1 +1.6

100))

−48

= 31,933 𝑈𝐺𝑋

These calculations are made for each loan

needed to cover the three SHS at the monthly

interest rate and payback time.

7.7 Limitations

The expenditures on kerosene and mobile

charging are expected to rise as the

incomes rise, but the reference is from Peru

and there are no found links between Peru

and Uganda in this context. Other elements

that influence the use of kerosene, such as

rooms in the house, the amount of children

studying and the general number of family

members, are not taken into account.

The income groups have a large interval,

and together with it, there are assigned a

share of rural households. It is not known

where these households in the interval

precisely are located, which limits the

flexibility of the households assigned to

income. Jumps in the kerosene and mobile

charging cost will therefore differ relatively

largely.

o As an example the income group of

“0 to 50,000 UGX with a midpoint

of 25,000 UGX” are assigned a 9.2%

share of the rural population, and

as an example 9% could have

40,000 UGX in income, which would

make a given solar home solution

more feasible for a large part of the

assigned population share. The

Solarnow 50Wp system with the

subsidy will be feasible for the 9% in

this example.

The SolarNow package is not completely

descriptive on what is in the packaged,

where elements on the picture from the

website shows components that are not in

the description, and what this means are

unknown. The data regarding the solar

packages from BBOXX are from Amaury

Fastenakels who works at BBOXX and gave

us the needed information. A verification of

the information from Amaury Fastenakels,

are not possible due to the lack of prices on

their website. Simultaneously the names of

the solar packages from Amaury

Fastenakels and the ones on the BBOXX

website do not match (BBOXX 2015). An

extensive search for PV dealing companies

in Uganda was undertaken and no company

provides the required data of a complete PV

package description together with its price

on their webpages.

An assumption regarding the SolarNow

credit option are made for creating the

initial cost and monthly payment through

the company, where an explanation are not

Page 46 of 97

given on the website. The BBOXX credit

schemes are from the data provided from

Amaury Fastenakels, where though a

written communication with him, an

understanding was achieved.

The maintenance cost for the solar panel is

not taken into account. The maintenance

cost only have an influence after the free

agreement runs out which is 24 months for

SolarNow and 36 months for BBOXX. If the

time spans of the loan are longer than the

free maintenance agreement, this cost will

have an influence. A cost for maintenance

in Uganda for solar home solutions were

not found, but can potentially have a large

influence.

The banks interest rates vary from

institution to institution; only three have

been taken out as examples and within

these examples declined rate have been

regarded as a flat interest rate. All of them

have the qualification of being micro-

finance institution, but the data are from

2011, thusly the interest rate might be

different in 2015. To be eligible for a bank

loan, specific criteria’s needs to be fulfilled,

such as “must run a business”, which

hinders some in lending finances in that

bank. How large the parts of the rural

population that qualify for these loans for

each income group are not available in the

used date. The formal financial institutions

have more qualifications than the micro-

financing institutions and their time span

together with their interest rate were not

found, hence not taken into account.

The inflation rate is not taken into account

to increase the simplicity. Without the

inflation rate, the solar home solution

becomes less feasible for the consumer.

7.8 Calculation Table 9 presents the annuity loan payment

calculations for each potential loan (monthly

payments highlighted in green).

Table 10 reiterates the BBOXX and SolarNow

first payment, monthly payments and payback

time spans. Recall that an assumption of this

business case is that rural households are not

able to save beyond one month, therefore the

“first payment” of each system is the payment

considered in the business case calculations.

Wp Solar System LoanYearly

Interest Rate

Monthly

Interest Rate

Payback

Time (Years)

Payback

Time

(Months)

Yearly

Payments

Monthly

Payments

15 BBOXX 1,068,750 404,736 31,933

50 BBOXX 1,757,500 665,565 52,512

50 SolarNow 1,210,000 458,227 36,154

50 SolarNow (S) 375,375 142,154 11,216

15 BBOXX 1,068,750 733,621 56,506

50 BBOXX 1,757,500 1,206,398 92,921

50 SolarNow 1,210,000 830,579 63,974

50 SolarNow (S) 375,375 257,668 19,846

15 BBOXX 1,068,750 1,389,375 104,189

50 BBOXX 1,757,500 2,284,750 171,334

50 SolarNow 1,210,000 1,573,000 117,959

50 SolarNow (S) 375,375 487,988 36,594

19.0%

30.0%

24.0%

1.6%

2.0%

2.5%

MICRO LENDING OPTIONS

4 48

242

1 12

Table 9 Micro lending options

Page 47 of 97

7.9 Results Table 11 to Table 14 present the comparisons of

household expenditures on kerosene and

mobile phone charging with the initial

costs/monthly payments for three SHS systems.

Where SHS payments are lower than kerosene

and mobile phone charging expenditures

(displayed in green ‘savings’), this business case

assumes

economic

feasibility.

[1] [2] [3] [4] [5] [6] [7]

Watt peak Company Total Cost (UGX)Total Cost on

Credit (UGX)

First Payment

(UGX)

Monthly

Payment (UGX)

Payback Time

(Months)

15 BBOXX 1,068,750 1,155,000 75,000 30,000 36

50 BBOXX 1,757,500 1,900,000 100,000 50,000 36

50 SolarNow 1,210,000 1,510,000 340,000 65,000 18

50 SolarNow (S) 375,375 468,443 105,477 20,165 18

COMPANY SYSTEMS AND FINANCING

Table 10 Company financing and payment plans

BBOXX

Finance

option

Initial Cost

1.6% Monthly

Interest

2.0% Monthly

Interest

2.5% Monthly

Interest

Monthly Income

Category (UGX)

Expense on

Kerosene and

Mobile Charging

(UGX) 75,000 UGX

31,933

UGX/month

56,506

UGX/month

104,189

UGX/month

1 25,000 7,500 no savings no savings no savings no savings

2 75,000 22,500 no savings no savings no savings no savings

3 150,000 45,000 no savings savings no savings no savings

4 250,000 75,000 savings savings savings no savings

5 400,000 120,000 savings savings savings savings

6 750,000 225,000 savings savings savings savings

7 1,000,000 300,000 savings savings savings savings

Micro-Finance options15Wp BBOXX System

(Total: 1,068,750 UGX)

BBOXX

Finance

option

Initial Cost

1.6% Monthly

Interest

2.0% Monthly

Interest

2.5% Monthly

Interest

Monthly Income

Category (UGX)

Expense on

Kerosene and

Mobile Charging

(UGX)

1,000,000

UGX

52,512

UGX/month

92,921

UGX/month

171,334

UGX/month

1 25,000 7,500 no savings no savings no savings no savings

2 75,000 22,500 no savings no savings no savings no savings

3 150,000 45,000 no savings no savings no savings no savings

4 250,000 75,000 no savings savings no savings no savings

5 400,000 120,000 no savings savings savings no savings

6 750,000 225,000 savings savings savings savings

7 1,000,000 300,000 savings savings savings savings

50Wp BBOXX System

(Total: 1,757,500 UGX)

Micro-Finance options

Table 11 15Wp BBOXX System

Table 12 50Wp BBOXX System

Page 48 of 97

Figure 15 amalgamates the results from Table

11 to Table 14 of the business case, showing the

share of rural households, which can feasibly

purchase the specific solar home solutions at

specific interest rates and payment plans. The

different colors define the different solar home

solutions. BBOXX 15Wp is yellow, BBOXX 50Wp

is green, SolarNow 50Wp is blue and SolarNow

50Wp w/subsidy is orange. For each of the solar

home solution there are four financial options,

the company payment and three micro-

financing options with different interest rates

and their monthly payments.

SolarNow

Finance

option

Initial Cost

1.6% Monthly

Interest

2.0% Monthly

Interest

2.5% Monthly

Interest

Monthly Income

Category (UGX)

Expense on

Kerosene and

Mobile Charging

(UGX) 105,477 UGX

11,216

UGX/month

19,846

UGX/month

36,954

UGX/month

1 25,000 7,500 no savings no savings no savings no savings

2 75,000 22,500 no savings savings savings no savings

3 150,000 45,000 no savings savings savings savings

4 250,000 75,000 no savings savings savings savings

5 400,000 120,000 savings savings savings savings

6 750,000 225,000 savings savings savings savings

7 1,000,000 300,000 savings savings savings savings

50Wp SolarNow System w/Subsidy

(Total: 375,375 UGX)

Micro-Finance options

SolarNow

Finance

option

Initial Cost

1.6% Monthly

Interest

2.0% Monthly

Interest

2.5% Monthly

Interest

Monthly Income

Category (UGX)

Expense on

Kerosene and

Mobile Charging

(UGX) 340,000 UGX

36,154

UGX/month

63,974

UGX/month

117,959

UGX/month

1 25,000 7,500 no savings no savings no savings no savings

2 75,000 22,500 no savings no savings no savings no savings

3 150,000 45,000 no savings savings no savings no savings

4 250,000 75,000 no savings savings savings no savings

5 400,000 120,000 no savings savings savings savings

6 750,000 225,000 no savings savings savings savings

7 1,000,000 300,000 no savings savings savings savings

50Wp SolarNow System

(Total: 1,210,000 UGX)

Micro-Finance options

Table 13 50Wp SolarNow System

Table 14 50Wp SolarNow System with Subsidy

Page 49 of 97

Figure 15 Share of Rural Household for which SHS is economically feasible

Page 50 of 97

7.10 Findings

Figure 15 shows that the lowest income groups

are unlikely to afford SHS regardless of

financing choices used in this analysis. The most

feasible option is the subsidized 50Wp

SolarNow system with a micro-loan of 1.6%

monthly interest paid over a 48-month period

(feasible for 91% of rural households). The least

feasible option is the unsubsidized 50Wp

SolarNow system using the company’s financing

plan (feasible for 0% of rural households). The

best scenario without a subsidy is the 50Wp

SolarNow system, financed with a 1.6% monthly

interest rate micro-loan paid over a 48-month

period, which is feasible for 76% of rural

households. Overall, the companies’ payment

plans are less feasible than the micro-lending

options.

To answer the sub-question of the business

case, under the current regime, 91% of rural

households can feasibly afford an SHS that is

subsidized by the PVTMA and financed by a

micro-loan with a 1.6% monthly interest rate

paid over a 48-month timespan.

8.0 The Niche According to Geel, a niche is defined as radically

different from the existing socio-technical

regime. This could, in the context of this project

be a technology or a service delivery model of

which the implementation would flourish within

this regime, leading eventually to a change in

the existing regime.

In order to identify solutions beneficial for rural

households, that could flourish within the

previously analysed solar market of Uganda,

three different service delivery models within

Bangladesh, the most rapid-growing country for

SHS, are identified. A different perspective from

a country such as Bangladesh could lead to

innovating insights, necessary when researching

niche technologies. If considered a niche, the

solution could potentially change the regime

leading to a shift in attention from grid

extension towards rural, household beneficial

regime. This chapter therefore answers the

following sub question: What niches can be

determined with this technology? The

technology refers to SHS.

8.1 Service delivery models

In Bangladesh, government adopted a strong

trend towards SHS electrification, with their

goal of installing 200MW of SHS electricity by

2015 (Syed M. Rahmana 2013). They do this by

implementing a program through a nationalized

financial institution called IDCOL (financed

largely by donors), in collaboration with 30

smaller partner organizations (PO) such as

smaller financial institutions. These

organizations select the potential customers,

offer financial and technical support on

location. IDCOL functions as the provider of

grants, refinances the systems, and sets the

technical specifications for the SHS that are

distributed. They take care of overhead

activities, such as publicity, training for PO and

monitoring performance (Palit 2013). Uganda

pursues implementing this model as well. The

Uganda Energy Credit Capitalisation Company

(UECCC) aims to facilitate investments for the

RE sector like IDCOL. According to UECCCs

website, their priorities are also considering

solar projects. Next to this, the RE policy from

2007 aims to “create decentralized coordination

at the lowest government level to support

renewable energy investments” as stated in the

policy analysis. This should create incentive for

PO to emerge and allow this collaboration to

happen.

Page 51 of 97

Another model from Bangladesh allows the

Rural Electrification Board to disseminate SHS

on a large scale by installing them at

consumers, and receiving a monthly bill for

electricity consumption. The consumer in this

case does not own the SHS. This allows for

adoption of SHS even without having initial

capital for investments (ibid.). This model is not

at all implemented in Uganda and thus could

serve as a potential niche. It is expected by the

authors however, that due to the fact that the

SHS segment in Uganda is largely dependent on

donor support, government lacks the financial

capacity to invest largely in SHS and to ‘lease’

them to consumers. Therefore, this is not

investigated in depth.

A third model, called micro-utility, allows for a

concept called swarm electrification, in which a

rural entrepreneur purchases a solar panel

together with several LED lamps and pays a

down payment of around 10% with a payment

plan covering for the rest (in the Bangladesh

case). Instead of consuming all of the produced

electricity, the entrepreneur connects

neighbouring households by

providing them with a LED lamp. The

entrepreneur charges a small fee for

the used electricity, and makes a

living out of it (Palit 2013). Scaling this

concept up could lead to multiple

connections, or more electricity

consumption per connection. This

eventually leads up to the

establishment of a larger mini-grid, as

the entrepreneur might be able to

expand its solar capacity due to its

increase in wealth. Moreover, as

electrification leads to economic

growth, the connected households, who

generally pay a fee smaller than for on-grid

electricity, are on time capable of installing

their own SHS. They could then choose to

become an entrepreneur themselves or sell the

electricity they generate to the initial

entrepreneur – refraining from additional time

and money consuming activities that come with

being a micro-utility. This could uphold

providing maintenance, reliability of the

electricity supply, amongst other obligations.

Eventually, a mini-grid of connected households

can connect to the main grid. The concept of

swarm electrification is shown in Figure 16 Four

stages of swarm electrification. The model of

swarm electrification, or micro utility is, as far

the authors know, not to a large extend being

exploited in Uganda. It is therefore considered a

niche, and is elaborated upon in the chapter

below

8.2 The niche: Swarm Electrification Solar Home Solutions will deliver electricity to

meet electrical demands including light, mobile

charging, and a radio. The spirit of Swarm

Electrification (SE) is that rural communities

gain electricity through a “bottoms-up”

coordination of existing resources. Essentially,

Swarm Electrification aims to gain “network-

Figure 16 Four stages of swarm electrification

Page 52 of 97

effect,” or achieving system value greater than

the sum of its parts, by interconnecting

households with and without SHS in four stages.

Initially, communities may pool resources to

acquire SHSs that specifically accommodate

household needs through user-centered design.

Next, communities connect SHS households

together creating a nano-grid. These nano-grid

connections, with the use of a “swarm

controller” (microchip that measures the in/out

flow of electricity) make it possible for

households to share the local supply and

demand of electricity, creating a small

marketplace. With an emergent marketplace, it

may become possible for net producers to

afford investment in larger systems. The

adoption of larger systems allow for the third

stage of SE to commence in which households

without SHS can connect to the nano-grid,

essentially making it a mini-grid9. With larger

systems in place and more households

connected, more advanced electricity uses are

possible such as agricultural processing and

storage. See Figure 16 for an illustration of the

concept.

SE relies on three main concepts; 1) that stand-

alone SHS have potential to serve more

electricity needs when connected, 2) village

households cluster in close proximity making

connection a viability, and 3) community

ownership and entrepreneurship help develop

the systems in an appropriate manner.

As aforementioned, SHS can reach a higher

potential when connected. This is due to the

variability of electricity generation and

9 Nano and Mini is two different scales of small systems, where

nano is the smallest with just a few connections and mini is the

largest with more than a few connections – without being a

transmission grid.

consumption due to a host of unpredictable

factors. In some cases, electricity generation is

higher than what a household typically

consumes, in which case the SHS battery

becomes full even before prime solar

production ends. This can reduce the efficiency

of the battery and threaten future battery

failure. Correspondingly, a household may

sometimes consume more electricity than their

SHS is able to generate, also increasing

vulnerability for battery failure. With a charge

controller connecting two or more SHS, it is

possible to balance excess consumption with

excess production.

For SE to work, households must exist in

relatively close proximity to each other. Though

many villages in Uganda are too remote and

with sparse populations to financially justify

extending central grid services or even larger

off-grid systems, it may be the case that the

clustering of homes makes nano/mini grids

possible.

SE also champions participatory engagement of

villagers in order to develop the energy

infrastructure in an appropriate manner and

pace. Interconnection of SHS provides

opportunities for co-benefits and the incentive

to protect and invest in solar energy

infrastructure. Successful mini-grid projects

include an education component in which local

entrepreneurs train to become technically

adept at maintaining the swarm system. Phillips

refers to these community members as swarm

area managers (SAMs). SAMs can take

responsibility for managing the solar

marketplace; trading and cashing-out electricity

credit. The cash-out model (or cash-in-as-you-

go, CAYG) is similar to PAYG (pay-as-you-go), a

model common in the mobile phone industry.

PAYG allows mobile phone users to pay for

airtime or internet on their phone when they

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need it. Likewise, CAYG allows net-producers of

electricity to sell their excess energy to the SAM

and instantly earn cash. The SAM is able to

resell the electricity to a net consumer at a

competitive price, earning a small profit.

As stated in the Solar Market chapter, the price

of PV continues to fall every year, the ability for

a swarm community to increase its generation

capacity greatly improves.

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9.0 Windows of Opportunity As Geels specified, windows of opportunity can

be divided in four different categories, or

pathways. In essence, the four different

pathways include:

Technological substitutions,

Reconfigurations,

Transformations and

De- and realignment.

This chapter aims to answer the sub question

What windows of opportunity can be

determined in which niches can emerge?

As stated, swarm electrification is not being

implemented on a large scale in Uganda.

Research pointed out that the model is fairly

new, and business cases have yet to prove their

economic feasibility. Considering the different

solar segments, this technology makes use of

SHS in order to create a community based mini-

grid. Windows of opportunity for this niche to

emerge are identified in this chapter. They

appear when the beneficial support

mechanisms of both segments are combined

and entrepreneurs thrive because of a feasible

business. Currently, the implementation of SHS

is expected to increase, where the trend of

support by government is aiming towards mini-

grid solutions and institutional PV. Should

entrepreneurs or local institutions be

stimulated by governmental support – in terms

of light-handed regulation, education and

training, access to financial mechanisms to set

up small utility businesses, tax exemptions and

subsidies for the purchase of solar components

– then it could lead to a large scale integration

of swarm electrification within the energy

sector. All these support mechanisms are

elaborated upon below in the context of Geels’

theory on pathways.

9.1 Reconfiguration pathways

Windows or pathways that lead to an increase

of sales for SHS and therefore potentially for

the emergence of swarm electrification, or in

other words, windows that lead to the adoption

of the niche within the existing regime. These

windows are categorized under reconfiguration

pathways. As a result, niches implemented

through this window result in a change in the

system architecture, i.e. the said increase of

SHS sold. They do not necessarily change the

regime itself, but change the energy mix which

is a part of the landscape. As stated by

SolarNow in the solar market analysis, they

predict an increase of sales for SHS over the

upcoming years. These windows are beneficial

for the emergence of swarm electrification, as

this generally requires only one household with

capital to make an initial investment, of which

surrounding households could benefit by

purchasing electricity for a low price. One SHS

in this case leads to the electrification, thus to

socio-economic benefits of multiple

households.The particular windows defined

that lead to this increase of sales in SHS are:

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9.1.1 Decreasing price of SHS

Global development of SHS has over the years

lead to a rapid decrease in the price per Watt of

a system. This tendency is proven within the so

called ’Swanson effect’, of which a graph is

shown in Figure 17.

Figure 17 The Swanson Effect (Bloomberg, New Energy Finance)

The effect suggests that “the price of solar

photovoltaic modules tends to drop 20 percent

for every doubling of cumulative shipped

volume.” (Moore 2012). This means that for

each additional solar photovoltaic module

produced, marginal prices go down. As prices

decrease globally, the effects will be present in

Uganda as well.

9.1.2 Increase in retailer competition

Deducted from the policy analysis, the private

sector is being offered more opportunity to

invest in RE solutions. The land act defines that

foreign investors cannot own land for their

utilities. This could prove to be beneficial for

SHS retailers, as they merely supply with a

module, and don’t build a plant. This

environment could lead to an increase in

private retailer competition within the market

segment of SHS, allowing for all kinds of

benefits for the consumer. These uphold:

An increase in quality of the panels and

therefore an increase in trust in the

technology;

interesting pricing mechanisms offered

by the retailer itself,

service packs included in the purchase

that guarantee the reliability of the

system by offering maintenance and

customer support;

a decrease in product prices

9.1.3 Increasing awareness for consumers

Part of the focus of the government, as stated

especially in the Renewable Energy policy of

2007, is increasing awareness amongst (rural)

inhabitants. Also the Mayor of Kasese has

explicitly stated that it is very important to

create awareness for sustainable alternatives

for electricity and energy in general

(Kabbayanga 2015). More knowledge on the

technologies behind these alternatives can lead

to more trust, eventually leading to an increase

in sales.

9.1.4 Increasing rural incomes

Of a household survey conducted in Uganda in

2012, it has been proven that there is an

increase of real income for rural households,

compared to the same survey conducted in

2009. These numbers are corrected for inflation

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and other influencing factors, truly showing the

increase of income (Uganda Bureau of Statistics

2014). In the solar market analysis, a correlation

between increased household income and solar

PV demand in Kenya has been found (Ulrich

Elmer Hansen 2015). An increase in income

leads to an increase in purchases of SHS.

9.1.5 Increasing demand for

telecommunication devices

This window is rather speculative, but a reason

for further increase of sales in SHS could be the

‘digital revolution’ spreading globally, requiring

companies to live up to standards concerning

internet and telecommunications - which might

require more rural inhabitants to be reachable

by phone. In an area far off-grid, inhabitants

often drive long distances to charge their

phones, creating the incentive to purchase SHS

as a part of being ‘connected’.

9.1.6 The chicken-egg phenomenon

Poverty and prosperity are interrelated via

many different factors, not defined in this

chapter. However, it is stated that a lack of

electricity is often related to poverty. Access to

electrification leads to (economic) prosperity,

but prosperity itself could also lead to access to

electricity. Creating a chicken and egg

phenomenon like visualized in Figure 18 (what

is there first?), should access to electricity

increase (due to neighbours purchasing SHS and

implementing the swarm concept), it leads to

prosperity for all consumers. Should on the

other hand prosperity increase due to external

factors, for example the exploitation of local

resources in local industry, it leads to access to

electricity. Either way, this phenomenon is a

window in which the sales of SHS could flourish.

Figure 18 Electricity-Prosperity relation

9.2 Transformation pathways

Should a window or a pathway involve the

government to actively focus on creating

coordinative institutional capacity and

beneficial conditions for mini-grids to emerge

potentially in the form of swarm electrification,

or in other words, involve actors that are

currently in charge to actively change regime

elements, the pathway is defined as a

transformation pathway. These pathways

eventually lead to solving existing problems, i.e.

coordinating the way in which the private

sector, local institutions and communities can

actively participate.

9.2.1 Governmental focus on mini-grids

As identified within both the policy analysis and

the solar market analysis, there is a tendency

from government to focus on creating an

environment in which local initiatives could

thrive. An environment in which local

entrepreneurs could more easily set up small

utility businesses by receiving education and

training, having access to local financial

institutions and being coordinated and

regulated locally, consumers of SHS could more

easily turn their own solution into a utility for

the benefit of others. In rural areas with poor

Lack of electricity

Access to eletricity

ProsperityPoverty

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employment rates, this could lead to the direct

creation of jobs for new entrepreneurs, and to

the indirect creation of jobs for households

gaining electricity.

9.2.2 Governmental & donor focus on

institutional PV

Although it is not their main focus, the

government is concerned with electrification of

off-grid institutions and identifies solar PV as

the way to provide them with electricity – also

stated in the solar market analysis. The analysis

also showed a large dependency on donor

support for institutional PV. The local

institutions located far from the grid such as

schools, health clinics and hospitals, which are

to a large extend making use of the same solar

technology as households, could directly benefit

from this focus, which can manifest in the direct

support of solar panels. Although not the

institutions primary business, being a larger

producer of solar energy they fit flawlessly

within the concept of swarm electrification as

they could function as a suitable ’SAM’ as

explained in the niche chapter. Or at least as a

reliable supplier of electricity to the SAM, for

their electricity demand is rather constant. This

could supply electrification and create jobs for

local communities without requiring a single

household to make the initial investment.

9.3 Technological substitution pathways If a window of opportunity leads to the large

scale emergence of swarm electrification and

turns donors, the private sector and the

government towards the tendency of

supporting the niche to emerge further, or in

other words, leads the niche to emerge within

the landscape and eventually alter the course of

the regime, one talks about technological

substitution pathways. Only one window has

been identified here, which is elaborated upon

below.

Figure 19 Map of the national grid of Uganda, provided by UEDCL

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9.3.1 Grid extension

Though considered the main obstacle for off-

grid, rural electrification, the tendency of the

government to approach rural electrification by

grid extension could paradoxically be used to

the advantage of swarm electrification.

Consider nationwide electrification as a

spreading virus, which spreads only from the

existing ’infection points’ or the existing grid.

From looking at a GIS map obtained from

UEDCL in Figure 19, showing the current

transmission and distribution lines, the areas to

which the grid extends is quite limited.

Now consider the emergence of mini-grids

everywhere, much like the virus shown in Figure

20, eventually connecting to the existing

transmission and distribution lines, leading up

to nationwide grid extension. This window only

appears if swarm electrification is already

emerging within the landscape, thus requiring

previously defined windows to do so. This

window could be considered a secondary

window, leading up to larger implementation.

As much of these projects will be locally

coordinated, run by local entrepreneurs and

supported by the private sector, imagine what

the support of the government could do, if the

funding, currently allocated towards grid

extension, be utilized for the benefit of swarm

electrification. Once the government sees the

potential of swarm to connect nationwide, they

might be motivated to adopt swarm

electrification as a method fully capable of

reaching nationwide grid-extension.

Figure 20 SWARM virus spreading

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Figure 21 Niches in Local energy planning

10.0 Suggestions This chapter covers the suggestions, or social

processes, which enlarges the windows, or

creates new ones in order for the niche to be

‘kickstarted’. Geel describes in the MLP theory

that there are three “social processes” that give

niches momentum to merge into the regime:

The building of social networks to enrol more

actors, the articulation of expectations or

visions and learning processes on various

dimensions (Geels 2012). This comprises the

institutional changes that consolidate the niche

into the regime, and will therefore answer the

last sub question: What suggestions would

enlarge the windows of opportunity or create

new windows within the regime in which the

niche can flourish?

10.1 Building social networks

According to Geel, suggestions that aim to enrol

more actors in the regime to give the identified

niche momentum are consolidated within the

‘building social networks’ category of social

processes. The following are identified:

10.1.1 Local energy planning

To improve the nation-wide energy planning –

the identified centralized top-down power

appliance – a suggestion is to decentralize the

planning and decision-making. Mayor

Kabbayanga expressed, that the national grid-

extension wouldn’t reach the whole population

in his district, because there are mountains

obstructing the grid from being feasible to

reach everyone (Kabbayanga 2015). In his

opinion, the districts know what opportunities,

barriers and needs there are in each district, as

they have an understanding of the local area,

behaviour, traditions and natural environment.

Hence they are closer to the consumers, know

their needs and have an opportunity for

creating a dialogue as well as knowing the best

potential energy resource within their district.

Trying to connect this to the MLP thinking it is

stated that the landscape can be recognized in

different social layers; Global, nationally and

locally, as seen in Figure 21. In each layer, there

is also a regime, which in this scope could be a

district energy plan.

The curious thing acknowledged here is, that

currently only one – out of the 111 districts –

has a district energy plan (Kasese District

through their Pilot Project: Champion District).

In this local landscape, with the local regime,

local niches can merge into the local regime and

benefit up through the layers – meaning the

merging of the niche also benefits on the

national and global level. Comprehensibly each

local regime can be different and each local

context can have different niches to merge into

their local regime – still all for the better of the

nation. The point of this though is that the

districts are better fitted to define their local

regime and local actors are better fitted to

come up with local niches fitting to their needs,

their culture and the opportunities in their area.

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Figure 22 Visualization of local MLP

Making an institutional change that allows or

redirect the power structure for decision

making and planning to the districts would thus

benefit the local participation, communication

and local feeling of involvement and ownership

of transiting their country to the better. The

current bureaucratic structure will be

challenged by a more bottom-up process,

where the access to involvement on the lowest

level of the hierarchy is made easier, and it is

not only a few people in the top of the pyramid

making the decisions. As noticeable above, a

change of the incumbent actors in the national

regime, shown in the actor identification

chapter, is occurring, involving the local context

in the development, as visualized in Figure 22,

where the green circle is the desired regime.

10.1.2 Utilization of young volunteers

In the National Landscape chapter, it is

identified that the population in Uganda is very

young. This can be seen as a potential to utilize

for the benefit of sustainable energy. One of the

actors identified in the actor identification

chapter, in Appendix 1, is “IDEAS for Uganda”.

They are volunteers, dedicated to develop

sustainable solutions for communities through

youth-led action. These young people have

great potential both for creating awareness and

to enlarge involvement of the local population

and would thus be a suitable tool to utilize and

support the government.

10.2 Articulation of visions and

expectations

Should social processes aim to attract more

funding and attention towards the niche,

provide guidance and direction to the internal

innovation activities, they are consolidated in

the suggestions that focus on the ‘Articulation

of visions and expectations’ that Geel identifies.

10.2.1 Adopt swarm as a method for grid

extension

If the government should see the concept of

Swarm Electrification as a fully capable method

for grid extension, as it is, more support could

be directed to the implementation of it. It is

expected that more support from the

government leads to a much larger adoption of

this concept, and thus rural electrification. This

attracts more private support, as the

government has the ability to create an

attractive environment for private investors.

Also, should the government adopt swarm

within their vision for rural electrification and

expect the Ugandans to pursue its

implementation, the concept will be spread or

‘articulated’ through the country by means of

education and creating awareness.

10.2.2 Create secure financial environment

Depending on which income group, and which

bank loan is possible for a person to achieve,

the possibilities differ for the purchase of a

solar home solution. An optimal situation for

the purchase of a solar home solution, would be

a low interest rate, a long time span on the loan

and a low initial cost for the solar home

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solution. It was identified in the business case

that it is difficult for the two lowest income

groups to achieve a feasible solution within the

current regime. Thusly for a feasible solar

solution for these two groups to occur, all the

parameters; interest rate, time span of loan and

initial cost, need to be regulated towards the

optimal situation.

In the business case it is seen, that by applying a

subsidy to decrease the initial cost of SHS, it

increases the share of the rural population

ability to afford different SHS within the three

micro financial options. Due to this, it is

important that the PVTMA subsidy extend

beyond the expiring date June 2016.

Furthermore, if the government and donors

would increase the subsidy it would create a

more conducive environment for the two

lowest income groups to attain a feasible

solution.

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11.0 Conclusion According to this paper, even Zaina, the 17 year

old girl living in Kasese district, one of the many

poor rural areas of Uganda can, in one way or

the other, benefit from solar electrification. This

conclusion aims to answer the research

question and sub questions, according to the

story of Zaina. The research question was:

How can the solar potential in Uganda be

utilized in electrifying off grid rural households

and be consolidated in the (electricity) regime?

By answering the sub-questions , an answer to

the research question is formulated.

What is the current landscape concerning

electricity in Uganda

The current landscape is three folded (global,

national and rural households) and it is

pressuring the current regime in to certain

directions. It is recognized that the global

ideology for development is through access to

electricity. Uganda is a country, where 85% of

the population lives in the rural areas, of which

only a mere 15 % have access to the national

electricity grid. Consequences are poor

education levels and unhealthy living

conditions, as other polluting resources are

exploited instead. Zaina belongs to the group of

rural inhabitants that do not have access to

electricity, and cannot profit from the benefits

it would give her.

What is the electricity regime for (rural)

electrification and what actors are in play?

Through the analyses of the legal framework

the pathway of the regime was identified as

mostly focused on grid extensions through

private-sector-led investments.

The incumbent actors in the current regime are

all on national level in close correlation with

global actors in form of foreign donors and

foreign investors. The Ugandan government has

acknowledged that they are vastly dependent

on this foreign financing and wouldn’t have

come so far without them. Simultaneously it is

recognized that actors on the local level as

districts, municipalities and consumers do not

have much influence on the decision-making

and the path of the regime. Zaina probably has

to wait until the grid extends to her, and

electricity prices become cheap, as she and her

community have very limited influence in

energy planning.

What solar solutions are available and how are

they being implemented in the current regime?

Solar Home Systems (SHS) with a capacity from

10 Wp to 100 Wp are the most direct solar

solutions for households like Zaina’s in Uganda,

though they make up only around 20% of the

total solar market. The rest concerns

institutional solar PV and solar solutions for

telecommunication and tourism. SHS are being

supported in several ways. Donor programs

provide subsidies on purchase for a maximum

of 50Wp and the government allows

exemptions from import duties and VAT on PV

materials. Despite this, the tendency from

government moves toward on-grid and mini-

grid applications of solar, and more solar

development by the private sector. Donor

support has been to this point the main driver

for the uptake in the PV market, the biggest

support has been in the institutional segment

and not necessarily in the SHS segment.

What share of rural households can feasibly

afford a solar home system?

The share of rural households that can afford a

solar home solution is depending on the

financing option and the technical aspects of

the solar home solution chosen. The business

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case identified that rural households in income

group one (9.2%) are not able to feasibly afford

a solar home system no matter the conditions

used in the business case. The other income

groups (90.8%) can feasibly afford at least one

of the solar home solutions, under a given

financial option. Zaina is in income group two

and is therefore able to invest in a SHS, as the

business case showed, if the SHS is of a specific

size and finance model.

What niches can be determined with this

technology?

From research into Solar Home System

integration in Bangladesh the concept of

‘swarm’ electrification is identified to be a

potential niche for Uganda to emerge within

the socio technological landscape and the socio

technological regime. The spirit of Swarm

Electrification is that rural communities gain

electricity through a “bottoms-up” coordination

of existing resources. Essentially, Swarm

Electrification aims to gain “network-effect”,

achieving system value greater than the sum of

its parts, by interconnecting households with

and without SHS. A micro-entrepreneur gains

revenue by providing demanding households

with excess electricity from producing

households. This leads up to the connection of

more SHS and households over time, thus

allowing for the term ‘swarm’. If Zaina does not

want to invest in SHS herself, she would still be

able to profit from Swarm Electrification by

connecting to the micro-entrepreneur, who

charges her a small fee. This model is to the

knowledge of the authors not being

implemented in Uganda.

What windows of opportunity can be

determined in which this niche could emerge?

The decrease in price for solar panels, the

subsidies offered by donors, the increase in

income for rural households-, consumer

awareness-, private sector engagement and

demand for telecommunication are considered

reconfiguration pathways that functions as

windows leading to an increase in sales for SHS.

The trend of governmental support towards

mini-grid solutions and institutional PV,

simplifies the emergence of micro-utilities and

thus serve as a window for swarm

electrification. Should entrepreneurs, or local

institutions be stimulated by governmental

support in terms of light regulation, education

and training, and access to financial

mechanisms to set up small utility businesses,

and by tax exemptions and subsidies for the

purchase of solar components, it could lead to a

large scale integration of swarm electrification

within the energy sector

What (institutional or financial) suggestions

would enlarge these windows or create new

windows within the regime through which the

niche can flourish?

Decentralizing the power by changing the

political structure is suggested as an ideal

institutional change for a more optimal

exploitation of resources and for integrating the

local actors in the regime. This entails, to give

the power to the districts of making electricity

plans for their own district, challenging the

current bureaucratic top-down approach, with a

more bottom-up like approach. Effects of this is

a better dialogue with the end-users of

electricity leading to more local participation

and hence a more conducive environment for

swarm electrification to thrive.

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After purchasing a 50Wp Solar Home System, subsidized

by the PVTMA and financed with a micro-loan, Zaina not

only saves money every month from forgoing the

expenditure of kerosene, but she and her family breathe

easier, study longer and enjoy the music of their favorite

Ugandan artist on their BBOXX radio. After the youth-led,

government supported, awareness campaign in the rural

settlements, IDEAS For Uganda shared their knowledge

about a new and innovative niche technology called

swarm electrification. This inspired Zaina to become the so

called SAM in her community. Now she trades electricity

with her neighbors, helping them access the affordable

electricity they need to meet their daily demands, all the

while making additional income herself. Zaina and her

fellow villagers, in collaboration with the Mayor of Kasese

district, organizing to implement the idea of swarm

electrification on a larger scale throughout the district,

consolidating it into the newest District Energy Plan. This

has aroused the REA to support the districts in making

their own energy plans, as it leads to a more optimal

exploitation of the renewable resources in the country.

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12.0 Further investigation In this chapter, recommendations on further

investigations within the topics touched upon in

this report are elaborated. This will give future

researchers opportunity to extend some of the

subjects that are in need of further

investigation.

12.1 Consumer influence

Due to limited research facilities, the real

influence of electricity consumers and non-

consumers cannot be assessed. One of the

assumptions this report draws is that there is

limited dialogue between the electricity regime

and local levels, and a more bottom up

approach is needed. Thus, it is important to

further research the local level (districts and

municipalities); how is the hierarchy, power

relations and what actors will be involved in the

dialogue between existing electricity

consumers, future electricity consumers and

the electricity regime?

12.2 Tribal influence

In relation to the above, the actor identification

recognized Ugandan tribes as actors. In an

interview with Godfrey Kabbayanga the mayor

of Kasese city he emphasized the importance of

tribes in the Uganda landscape. People identify

with their tribe and it is deeply rooted in the

cultural values Ugandan people have. Tribal

kings have political power and people of the

tribe elect politicians according to what

individual, the king has given his blessing

(Kabbayanga 2015). As the researchers of this

report were not capable of going to Uganda and

get information first hand on the tribal culture,

a further investigation is needed on this subject.

In the local participation model, recommended

in this report, it is important to know

extensively how much power the tribes have in

the decision making and understand how tribes

will be involved in the dialogue between the

electricity regime and local levels.

12.3 Practical implementation of Swarm

Electrification

Swarm Electrification is a new approach to

electrification that is yet to be proven in

practice. Further investigation on the matter is

needed to gain more practical experience on

the technical and business aspects of the

implementation. In the authors mind, SE is one

of the most exciting aspects of electrification in

developing countries and a great opportunity to

explore the social economic effects it will have

on people. In context to the swarm

electrification, further investigation is needed

on the electricity market of Uganda. If SE is

going to be implemented on a large scale the

impacts on both the solar and other renewable

energy markets are unknown.

12.4 International politics This report touches on a global paradigm shift

in which the agenda and investment of

development changes from western countries

to eastern. Meaning that China has increased

investment in Africa, and Uganda is no

exception. What effects do these “eastern”

influences have on political processes, decision-

making and policy design? Is it going to shape

the future of Uganda´s electricity regime and

what impacts will it have on innovative niches

like swarm electrification? These questions are

all interesting research aspects, because in the

research of this report the authors have come

across indicators suggesting these “eastern

influences”. For example, Uganda’s atomic

energy program that the Government of

Uganda and the president are currently

engaged in, is possibly due to the large

investments the Chinese are willing to

contribute to the project.

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12.5 Rural urban migration

Slum electrification is a burgeoning issue as

folks move from rural to urban in an increasing

rate. As previously mentioned in the

introduction Uganda is one of the fastest

growing, youngest, and most rural populations

in the world. Rural-urban migration is though

on the rise and as more people move to urban

areas such as Kampala, more pressure is being

added to the already fragile infrastructure.

Some part of the urban population live in slum

like condition and are without access to

electricity. It is an interesting angle to

investigate this population when it comes to

electrification. Would the swarm electrification

approach be successful here? The authors of

this report highly recommend that this aspect

would be further investigated, because it adds

depth to one of the main problems Uganda as a

nation is facing, the overall lack of

electrification.

12.6 Reliability of delivery on subsidies

From several sources it was deducted that the

reliability of payment from the PVTMA subsidy

on solar components is questionable. One

company stated that they fell a strong 500.000

USD short on these payments. As this is not

covered in this report, it is suggested that such

effects are further investigated through on the

ground research.

Page 67 of 97

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Appendix 1

1.1 Electrification legal framework Analyzing the legal framework is an important part of defining the path of the energy regime. It defines

the laws in which the different actors operate and in which the policies are framed.

1.1.1 Electricity Act of 1999 In 1999, the Power Sector Restructuring and Privatization Strategy was set in motion by Uganda’s

government, in order to e.g. increase the power sectors’ efficiency and meet growing electricity

demands, by privatizing it. This led to the release of the Electricity Act in 1999, providing the legal

framework over the electricity market. The Electricity Act entailed the establishment of the regulating

government body, the Electricity Regulatory Authority (ERA), and a jurisdictional entity enforcing the laws

created in the act, the Electricity Disputes Tribunal (EDT). The Act targeted the removal of the monopoly,

and permitted privatization of the market. All parties involved with the generation, transmission and

distribution of electricity fall under the jurisdiction of the act. Privatization would lead to new infusions of

foreign capital, increasing grid stability, access and reliability. The unbundling of the UEB was formally

completed and the separate organs were in business from 2001.

As soon as the ERA was established, the former publically vertically integrated Uganda Electricity Board

(UEB) was split into three different private companies governing over the on-grid power utilities, one for

Generation, one for Distribution and one for Transmission. Before this, the UEB had an economic and

regulative monopoly over the power sector, which was depriving the economy from growing (D'Ujanga

2005). Up to that point, public regulation of the energy system had led to low efficiency characterized by

a high level of system losses (up to 40%), unreliable and poor quality of power supply constraining

business development, low coverage and access to the grid, the Utility (UEB)’s inability to service its debts

and unfulfilled export potential.

Within the electricity act, the following key aspects are laid down:

- The establishment of the ERA

- The establishment of the authority funds

- The establishment of the EDT

- The process of application for licences

- The rules and conditions for maintaining a licence

- The application requirements for licences

- The establishment of the Rural Electrification Fund (REF)

- The rules on utility land use

- The rules for setting up tariff structures

- The rules and rights for consumers

It is stated in the act that when an Independent Power Producer (IPP) does not exceed the production

capacity of 2MW, the ERA is allowed to delegate the function of setting tariffs and issuing licences for

these IPPs to other institutions or governmental bodies then the ERA (Ministry of Energy and Mineral

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Development 1999) (EIA 2012). Up to 0.5 MW for generation, a license is not required, but registration of

the IPP is still necessary. For all distribution activities, a license from the ERA is required. In the current

system, there are no licensees within transmission, import and export other than the owned by the

government utilities (UETCL N/A).

Below 4 GWh in annual electricity distribution, the ERA can delegate the issuing of distribution licences to

local governments. This also applies to the licences required to sell electricity. If annual sales are below

four GWh, a licence is to be issued by local governments in compliance with the ERA.

The Act states that all rural electrification-funding resources will be consolidated in the Rural

Electrification Fund, the REF, which is under the authority of the Rural Electrification Board (REB). The REF

is made possible by funding from Parliament, levies on bulk purchases of electricity from power stations

and donations, gifts and grants. The fund is used for supporting rural electrification programs by

organizing promotion campaigns to gain awareness, by doing research on rural opportunities and by

doing investments in private and local community driven projects, both on-grid an off-grid (Bbumba

2001).

1.1.2 Other Acts Other acts, which are relevant for off-grid rural electrification, include the Land Act, which defines that

foreign investors are not allowed to own land for themselves but instead have to lease it, and the Tax Act.

The Land Act potentially leads to increased costs when setting up business, as investors get hindered

because of bureaucratic processes (Acode 2014). The Tax Act defines investment incentives that allow for

tax-free import of plant and machinery, and for the elimination of Value Added Tax on the import of solar

components (Uganda Revenue Authority 2014). In 2008, the Atomic Energy Act states that the energy

sector should consider a peaceful use of nuclear energy (Ministry of Energy and Mineral Development

2008 (A)) Yoweri Museveni, the president of Uganda, has stressed on many occasions that Uganda would

use its Uranium deposits to develop energy in order to supplement the future capacity of hydro and

geothermal power in the country (Atomic Energy Council of Uganda N/A). According to the National

Development Plan and Uganda Vision for 2040, Nuclear energy can only be part of the mix should there

be a stable grid that can maintain the electricity demand and supply of the reactors (Hinamundi 2010)

1.1.3 Findings From the legal framework a variety of findings are identied:

From 2001 the entire electricity market of Uganda underwent a transition from being government and

donor driven towards private sector driven development, due to privatization of the electricity utilities.

This is done in order to motivate foreign investment, in order to expand the grid.

Within the electricity act, it is stated that there is the possibility of decentralizing regulation, when it

comes to the production and distribution of electricity. This is mainly for smaller size solutions, up to

0,5MW of production capacity and 4GWh of annual sales. However, this corresponds to mini grids that

expand up to the electrification of 50.000 electricity consumers, considering the average consumption

per capita of 75kWh.

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It seems that every solution that generates electricity has to be at least registered, if production does not

surpass 0,5MW. This does therefore also include household solar solutions. This could be a potential

downside for consumers to purchase such solutions. On the other hand, below 0,5MW no licenses have

to be paid for, potentially creating incentive for local producers to set up small utilities.

The fund of the Rural Electrification Agency is based on governmental and donor support. There is no

additional funding by for example taxes or levies, which is the case with the ERA – who is obtaining

license fees, a major source of income used for on-grid electrification.

It could be demotivating for foreign investors to startup businesses as they are restricted by the land act,

not allowing them to own land for their own but requiring them to lease it. They are however motivated

by the tax act allowing them to freely import machinery and equipment, as well as solar components. The

latter is therefore also motivating for households as this leads to cheaper household solutions.

The establishment of the atomic act shows that the government is focusing on the implementation of

large scale nuclear energy, as this is only possible on-grid, should the grid be stable.

These findings are considered in the policy analysis of the next section.

1.2 National Policies / institutional framework This chapter aims to identify the planning discourse by analyzing the energy policy framework. In the next

chapter it is discussed whether this discourse is desirable for the implementation of off-grid solar

solutions and what the possibilities with this regime are. This chapter is meant to prove or disprove the

hypothesis that the current energy regime is not leading towards large-scale rural electrification.

The chapter provides an overview of the different policies, plans and strategies that have an influence on

electrification of the country. Figure 1 illustrates the policy timeline since 1999. The policies and plans

that are being analyzed in this chapter are:

The Ugandan Energy Policy (2002),

Renewable Energy Policy (2007),

Uganda’s National Development Plan (2010),

The Rural Electrification Strategy and Plan (2001 and 2012) and also the

Energy for Rural Transformation program (2002, 2008 and 2013).

The ERA three-year Business Plan.

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Figure 1 Energy policy timeline

1.2.1 Rural Electrification Strategy and Plan The first program to be implemented the Electricity Act 1999 was written down in the Rural Electrification

Strategy and Plan in 2001. This Plan is unfortunately not being found even though a few of the later plans

are referring to it. The main objectives from this are hence found through other sources referring to this

plan. The objectives seem to have been to create access to electricity for 10 % of the rural population in

2010 and attract private investors to do the finance for it. In 2001, where the plan was made, only 1 % of

the population had access to electricity in the rural areas (Dunbar 2013). The strategy to create this

access to electricity was to extend the main grid, develop isolated grids (off grid) and disseminate solar PV

systems, but the specifics on how was not found. The report is though continued in the Rural

Electrification Strategy and Plan in 2012, which is elaborated later in this chapter.

1.2.2 The Energy Policy 2002 The policy comprises four sub-sectors; Power, Petroleum, New & Renewable sources of energy and

Atomic Energy. The focus for this analysis has been kept to Power and New & Renewable sources as the

petroleum segment is mainly utilized in the transport sector, not in electrification (Ministry of Energy and

Mineral Development 2002).

In the 2002 situation there was in general a lack in efficiencies due to old technologies, old products and

bad usage of resources (especially with biomass). This was due to both a lack of knowledge and a lack of

awareness, because of unskilled labor, inadequate communication and scarcity of capital (Ibid.). There

was inadequacy in public investments as the government had its focus in private investments. However,

due to high initial costs in renewable energy solutions (RES) there is a lack of incentives to invest in the

energy sector (Ibid.).

These lacks in the energy sector has led to 5 broad objectives (Ibid.):

- To establish the availability, potential and demand of the various energy resources in the country

- To increase access to modern affordable and reliable energy services as a contribution to poverty

eradication

- To improve energy governance and administration

- To stimulate economic development

- To manage energy-related environmental impacts

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Within the second objective there is outlined a number of points to achieve a conducive environment to

accelerate rural energy supply and access by. This includes (Ibid.):

Applying subsidies exclusively on capital investment

Applying light-handed regulation to facilitate investment in rural energy projects

Having differentiated tariffs for different areas or projects to reflect investment and supply costs

Exploring schemes to assist consumers to purchase appliances thereby increasing the speed at which

the load of new consumers matures

Formulation of guidelines on organising rural communities to enable them access to better provision

of energy services

More specifically, they want to provide with affordable energy for households to improve the social

welfare in the rural population. It is recognized that biomass also in the future will be the dominant

source of energy in the rural areas, therefore it is a goal to improve the efficiency in the use of biomass

(Ibid.). Furthermore, it is in the government’s interest to specifically target provision of energy to

productive activities as home-based industries, hence in favor for households and local enterprises. The

strategy for this is to create a Household Energy Plan to make awareness and knowledge of better

utilization and alternatives and also to link electricity together with other sectors as forestry, agriculture,

transport, health, education and sanitation. On the supply side it is desired to build an adequate and

reliable energy supply. The strategy to do so, is by expand the current system at a minimum cost and

create incentives to attract private sector investment by easing the access to loans, giving governmental

guarantees and “smart subsidies”, or grants, for infrastructure investment (Ibid.). Furthermore, the

government wants to implement the Rural Electrification Strategy and Plan. In this strategy it is

mentioned to make it easier for “capable sponsors” to initiate and develop electrification projects and

also train the private sector in development and operation of isolated power supply systems (mini-grid

and PV), which hence contributes to off grid solar PV solutions.

All of the objectives of this policy have strategies and the implementation of all these strategies are

estimated to have a total cost of 1.84 billion US$, where 400 million US$ goes to rural electrification

projects (Ibid.). There is though not a timeline (deadline) to the implementation of the strategies. The

expectation is that 68 % should come from private investors and 32 % from public (government or

development partners) (Ibid.). Of this rural budget 322 million US$ is going the implementation of this

Rural Electrification Strategy and Plan, which as mentioned seeks to contribute to the objective of

increasing access to modern energy in rural areas with the strategy to extend the grid, develop isolated

grids and dissemination of solar PV systems.

The Ugandan Energy Policy, 2002, is in general unspecific. The objectives and strategies are valid and

make sense, but are on such a basic, level that it is not clear, what the focus is and what they are actually

going to do. An example in the policy is a strategy to: “Develop, where necessary, appropriate regulatory

frameworks and capacities”. “Where necessary” does not say anything and it is “too easy” to say. All of

the objectives and strategies is to “develop schemes, attract investors, create awareness” etc. without

saying what they actually are going to do and when.

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One can argue that only around 20 % of the total budget for rural electrification is not very much and is

clearly not the focus. This being said, rural electrification also implies the extension of the grid to a certain

extend and not only off grid or mini grid solutions. Much of the funding is expected to come from private

investors, which is only an expectation and thus not certain.

1.2.3 Energy for Rural Transformation This is a program made by the Government of Uganda and supported by the World Bank in 2001. It aims

to: “increase access to modern, clean affordable energy to millions of rural Ugandans over the next

decade.” (Ministry of Energy and Mineral Development 2002). The monitoring ministry is the Ministry of

Energy and Minerals Development and has to make up the strategies and plans and attract private

investors to do the physical investments. The rural aspect is starting to get more focus, where

development earlier has focused on the urban areas, as it is here the main industry and economy is (lbid).

The program is divided in to 3 phases working over this decade.

1.2.3.1 Phase 1 The main objectives of this program is also mentioned to be in line with the Rural Electrification Strategy

and Plan from 2001 and concerns increasing health and education by improving the access to electricity

for institutions working with this (Ministry of Energy and Mineral Development 2002). So the focus is

more on the institutions and energy services in the rural communities rather than households and local

enterprises. As in the Ugandan Energy Policy it is reckoned that the main fuel for rural areas still is going

to be traditional fuels (especially firewood), the objective is to improve the efficiencies of these (Ibid.).

The strategy is to promote renewable energy through guidelines of usage and workshops in the rural

communities and let private investors expand capacity through mini-plant projects – mainly hydro and

biomass. To meet the objective of improving efficiencies of traditional fuels the government want to do a

pilot project on biomass gasification (Ibid.). It is recognized that the knowledge about gasification of

biomass is low to non-existent in Uganda, so the first step is to make pilot projects and creating human

capacity, by training engineers within this field, to adapt this “new” method of making electricity (Ibid.).

Simultaneously the program seeks to make a foundation for the energy sector, which includes finding

potential sites for plants, make a map of connected people – finding the underserved rural areas

(disadvantaged rural), to monitor the sector and involving other affected sectors (Ibid.).

it is stated that the country has abounded solar potential, but there are no strategies on how this should

be utilized.

1.2.3.2 Phase 2 This phase started in February 2009 and is a continuation on the first phase (Ministry of Energy and

Mineral Development 2008). The main objects for this phase is thus to utilize the knowledge and the

institutional foundation established through the first phase. The institutional framework includes the

Rural Energy Board (REB), the Rural Energy Agency (REA) and the Rural Energy Fund (REF) all established

in 2001. One objective is to expand grid coverage and accelerate investments in the rural energy sector

(Ibid.). Where the implementation in the first phase was more case-to-case based, the plan is now that

REA can monitor more projects at the same time where they can get assistance from the REF (Ibid.).

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Another objective is to expand the decentralization of responsibilities - meaning monitoring and

management rural electrification projects. The last objective is to utilize the knowledge gained from the

first phase pilot-projects and also continue doing more pilot-projects to keep improving the knowledge of

technologies within different sources (Ibid.).

This second phase program has six main areas to cover, where the second and third area is the

development of independent grids (off-grid) and implementation of solar PV. The independent grid

program is especially meant for local enterprises under rural settlements. The program support

distribution lines and small generation systems - mainly from renewable sources, most hydro though

(through experiences from phase 1). The generation from renewable sources is thus also qualified to get

a subsidy from the Global Environmental Facility (GEF) to assist the implementation (Ibid.). Where the

independent grid program is for more concentrated rural areas the solar PV program is for homes and

local enterprises in the more dispersed areas (Ibid.). It is a program that will be implemented by various

actors as REA, the Bank of Uganda, the Private Sector Foundation and private solar PV companies selling

applications.

1.2.3.3 Phase 3 The third and last phase of the ERT is in line with the Rural Energy Strategy and Plan 2012 and therefore

has the same objectives and strategies. More elaborated is this program divided in to three components,

with the first component as the biggest (Rural Electrification Agency 2014). The first component is on grid

solutions that target to connect every social amenity, i.e. schools, health-centers and water sources, and

is monitored by the REA (Ibid.). This means to expand the national grid to these institutions. A lot of these

institutions are though far from the grid and these are what the second component encounters.

The second component does thus finance installations of solar PV on these institutions especially for USE

and UPPET10 schools (Ibid.). This component is done by a cooperation of three ministries; Ministry of

Health, Ministry of Education & Sport and Ministry of Water & Environment, but also in cooperation with

REA for not making overlaps of the implementation.

The last component is the smallest and includes developing other renewable sources, such as geothermal

and small hydro and is implemented by the MEMD in collaboration with the Ministry of Local

Government (Ibid.).

1.2.4 The Renewable Energy Policy of 2007 In 2007, the REA constituted a task force in collaboration with the MEMD, the ERA and multiple private

and public actors an created this document as a substitute to the Energy Policy released in 2002, to

increase the use of renewable energy sources within the countries’ energy mix.

The overall goal of the Renewable Energy Policy was increasing the use of “modern” renewable energy

from 4% in 2007 to 61% by 2017 (Rural Electrification Agency 2007). Modern renewable energy sources

10 Universal Secondary Education policy (USE) is part of the Ugandan government’s Universal Post Primary Education and Training (UPPET)

program. Launched in 2007, UPPET aims to provide quality options for the increasing numbers of students completing primary education and

seeking a secondary education. Among those options: additional and better trained teachers. (World Bank 2010)

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concern sources that can transform energy into electricity, derived from wind, water, solar, geothermal

or biomass sources. The effect of the policy will be a diversified use of renewable sources in order to

increase energy security, and a presence of distributed generation so to reduce the risk of

overdependence on singular sources.

Reasons for this policy are the increasing costs and uncertain future of fossil fuels, making them (become)

too expensive for developing countries (lbid.).

With an electricity deficit of 165MW, massive load shedding and rolling blackouts, and a rural

electrification rate of 3 % as of 2007, central grid extension to these areas of the country does not offer a

short term solution. For this reason, as stated in the policy, decentralized, off-grid electricity solutions are

being promoted (lbid.).

1.2.4.1 Objectives Within the policy, the following main objectives are considered:

- Develop, implement, maintain and improve the institutional framework so that there is a

maintained interest in renewable energy investments

- Create a financial and fiscal policy framework that attracts more investors

- Raise public awareness to enhance local participation

1.2.4.2 Institutional Strategies The objectives are specified into strategies to be implemented within a relatively close time frame (most

before the end of 2007) and are divided into different categories. The key strategies for this analysis are

shown below, concerning the two first objectives. These objectives are:

Institutional and regulative strategies

- Create a standardized document, the Power Purchase Agreement11 along with Feed-in Tariffs in

order to stimulate the distributed generation of electricity on-grid

- Create legislation and regulations for the promotion of RET. An example is encouraging local

authorities to use agricultural land for energy farming, and revising building codes to incorporate

solar heating (Rural Electrification Agency 2007)

- Create regulations for connection to the grid by renewable IPPs

- Create decentralized dialouge at the lowest government level (district local) to support (the

promotion of) RE investments

1.2.4.3 Financial and fiscal strategies - Establish mechanisms through Public Private Partnerships (PPPs) including subsidies for the

stimulation of RET

- Establish financial tax regimes favouring RE

- Establish risk mitigation mechanisms

11 A standardized agreement between an IPP and the transmission utilities UETCL

Page 80 of 97

- Establish financial

schemes such as funds to

enable development of

local RET in rural areas

1.2.4.4 Targets The main targets considering

energy source distribution and

rural electrification are shown in

Table 15 (Rural Electrification

Agency 2007).

Other strategies include new

discount schemes covering on-

grid rural electricity services to

make them more affordable and

increased support for IPPs as local

sources of supply in order to allow

and motivate rural electric service

providers to purchase directly from these IPPs. The strategies are mainly to increase institutional

development

1.2.5 National Development Plan 2010-2015 This plan is the first of six and seeks to stipulate the medium term strategies of the country in the period

from 2010-2015 (National Planning Authority 2010). The National Planning Authority (NPA), is the

governmental institution responsible for the development of Uganda and is the developer of the plan.

The NDP is monitored by the National Planning Authority Board in cooperation with key actors and

departments. The six National Development Plans is a way of implementing medium term goals to

achieve the long-term goal of 2040 – the Uganda Energy Vision. The theme of this NDP is: “Growth,

Employment and Socio-Economic Transformation for prosperity” (Ibid.).

The plan is a holistic approach through various sectors, but the focus will only be on energy development.

Within the Energy sector there is made 8 objectives, where only one is for rural electrification. As all of

the goals set by the NDA are on-grid goals, the focus is a centralized, on grid, approach, with investments

in large plants and transmission lines. The budget of the NPA shows that only 3% is allocated towards

rural electrification, which in this case means, towards the distribution grids, financial mechanisms and

institutional improvement (lbid.). The strategy for accelerating the rural electrification is to expand the

grid towards district headquarters. This is done by extending the grid to the district headquarters,

providing subsidies to independent power producers, implementing community schemes and investing in

energy transmission to rural and urban areas (lbid.).

Another objective that has an influence on the topic of this report is promotion of renewables. There still

is a main focus on gasification of biomass and the training of human capacity, but the strategy is also to

provide subsidies for solar PV systems on a household and institutional level.

Table 15 Energy source distrubtion main targets

Page 81 of 97

1.2.6 Rural Electrification Strategy & Plan As mentioned earlier this plan is a continuation of the first Rural Electrification Strategy and plan from

2001. This plan is made in 2012 and covers the period from 2013-2022 (Ministry Of Energy And Mineral

Development 2012). The plan has been designed to accelerate the national coverage and consumer

access of electricity. Even though there have been strategies to this target in all of the policies, it is

recognized that the coverage and access still is too low and the targets are never achieved. The main

objective of this RESP is:

“To position the electrification development program on a path that will progressively advance towards

achievement of universal electrification by the year 2040, consistent with the existing policy of the

Government, while ensuring the displacement of kerosene lighting in all rural Ugandan homes by 2030”

(Ibid.).

One of the strategies contributing to the goal is to achieve a rural electrification access of 22 % in 2022

(from the 2012 level at 5 %). Achieving access is here defined as consumers who will be utilizing electricity

in their homes, business or institutions (Ibid.). The government will now take more responsibility in doing

the commercial and financial risk-taking, as it was hindering the private sector to invest in this sector due

to the risk of the investment. Also the locals will be more involved i.e. the beneficiary population will be

given a more robust role in the development (Ibid.). The 22 % is estimated to be of 1,200,000 on-grid

connections and 138,000 off-grid connections. These off-grid connections are based on renewable

sources, mainly solar PV through solar home systems (SHS), and mini grids (Ibid.). Most off-grid funding is

appointed towards the PVTMA program to motivate the implementation of solar PV. To ensure that the

goal is being reached this time, there will be done annual follow-up with a new-developed framework by

the REA to correct any weaknesses and to identify impediments to the expansion.

1.2.7 ERA three-year business plan In order to carry out their mandate established by the Electricity Act, the ERA created a business plan in

2014 with strategic objectives to ensure this to happen. It is the first implementation of the strategy of

the ERA for a period of ten years, from 2014/2015 to 2023/2024 (Electricity Regulatory Authority 2014).

The main aims of the plan all consider the development of on-grid electrification, as is derived from their

main (technical) strategic objectives (Ibid.):

- Increasing generation to meet present and future demand by attracting investors

- Promote energy efficiency and demand side management

- Increasing efficiency in generation, transmission and distribution,

- Strengthen electricity infrastructure (the grid)

Other objectives include institutional or organizational improvements.

The objectives are realized by the allocation of a budget of approximately 40 billion UShs, that will be

mainly (>75%) funded through the levies on the generation of electricity and by issuing licences by the

ERA. It is expected that the fees on licences will go up (lbid.). Additionally, the ERA expects the sector to

contribute as well (±10%), which is collected through a difference in tariffs. Should the required budget

exceed expectations, the ERA is allowed to request the minister and the Ministry of Energy for additional

funding (ibid.) Further analysis for this plan is considered unnecessary.

Page 82 of 97

1.3 Actor identification

The actor identification is an instrument to address all the actors that are influenced or have an influence

on the electricity sector in Uganda. In Table 16 the main actors are identified.

Here each actor is described, which function it has, what values and what kind of power mechanism it is

utilizing. The authors of this report went in to extensive research on the actors involved in the socio

technical regime. The actor identification is contributing to question 2 of the phronetic planning theory

and helps pinpointing who gains who loses, and by which mechanisms of power?

Actor Functions/responsibilities Values Power

The President The president has the capability of

fast-tracking the decision making

process concerning licences, grants,

subsidies and other financial

mechanisms in order to give certain

projects priority over others. These

fast-track decisions mainly concern

the larger scale projects connected to

the national grid, and as a negative

effect undermines investor confidence

especially in smaller scale projects

(Acode 2014). Next to that,

statements of the president in news

appearances can cause a shift in

interest for foreign investors as well.

In June 2014, the president stated in a

conference that as long as the price

per unit of solar energy would not go

down, the country should be prepared

for nuclear energy (New Vision 2014).

Economical,

Sociological

Political

Actor Functions/responsibilities Values Power

Ministry of Local Extends the reach of the authorities to Local Political

Page 83 of 97

Governments rural locations. A supporting actor

helping Ministry of Energy and

Mineral Development (among other

ministries) with local reach .

governments

Ministry of Energy

and Mineral

Development

(MEMD) and the

Energy Department

(ED)

Hierarchically, the Ministry of Energy

and Mineral Development (MEMD) is

the main political body in the energy

sector. The Ministry is responsible for

policy formulation, promotion,

coordination, monitoring and

evaluation. Uganda´s National Energy

Policy is so far centralized, thus there

are no energy officers at sub-

national/district level. The MEMD

works in collaboration with the

Ministry of Finance, Planning and

Economic Development considering

the application of funding, the

Ministry of Water and Environment

considering deforestation and forestry

biomass policy and the Ministry of

Local Government for the

decentralized or local reach.

Sustainability,

economic and

social

development

Political

Rural Electrification

Agency (REA) and the

Rural Electrification

Board (REB)

The Rural Electrification Agency that

came into being in 2001 as an

autonomous entity of the

Government. The REA realizes

MEMD´s rural electrification plans as

specified in the Rural Electrification

Strategy and Plans. The Rural

Electrification Board (REB) consists of

representatives from collaborating

ministries, the private and financial

sectors, and donors and NGO’s. This

board, amongst other activities,

advises the Minister of Energy on

policy reformation, criteria for

Political

Page 84 of 97

assessing fund requests and in return

receives general directions for policy

reformation. The REA functions as the

REB’s secretariat and is the centralized

authority for planning and

implementing the resource

requirements of the Government´s

Rural Electrification Strategy and Plan

(RESP), published by the MEMD. REA

works with the beneficiaries and

collaborates with private sector

actors. It intends to ensure an

adequate supply of resources and

competencies to implement the RESP.

The rationale is to ensure better

coordination and to avoid

disaggregation of rural electrification

planning and implementation

(National Planning Authority 2010)

Annually, the REB and the Minister,

involves actors from local authorities,

all ministries, the private sector, the

financial sector and the ERA into a

meeting, in which the fund

applications and policy design

considering rural electrification is

discussed. The Minister is responsible

for reporting to Parliament.

Actor Functions/responsibilities Values Power

Electricity Regulatory

Authority (ERA)

The Electricity Regulatory Authority

(ERA) is a governmental institution

established by the Electricity Act of

1999 and commenced its activities in

2000. The ERA officially exists out of

five members appointed by the

minister. These members are required

to have high moral and high skill in

either management, economics or the

Political

Page 85 of 97

electric sector. The ERA derives its

mandate from chapter 145 of this Act,

to regulate the generation,

transmission, sale, export, import and

distribution of electrical energy in

Uganda. The purpose of the ERA is to

regulate the industry independently

from the ministry or any other person

or authority. Regulation involves

setting maximum and minimum

prices, establishing minimum quality

of service standards and specifying

entry and exit conditions (Bernard

Tenenbaum 2014). They are in charge

of issuing licenses for the generation,

transmission, distribution and sales of

electricity. ERA has the authority to

establish a tariff structure, investigate

tariff charges, and approve the rates

of charges. The ERA’s mandate is to

(Electricity Regulatory Authority

2014):

- Regulate the provision and

consumption of electricity in

Uganda;

- Oversee the efficient

functioning and development

of the electric industry;

- Promote both private and

public investment in the

industry in order to ensure

security of electricity supply;

- Guarantee efficiency and

effectiveness in the electric

industry;

- Safeguard the interest of

different actors and;

- Promote competition in the

Page 86 of 97

electricity sector They do so by

enforcing directions and

improving performance

standards to ensure

compliance with the Electricity

Act. As does the REA, the ERA

advices the Minister on the

need for electricity projects.

The funds of the ERA consist

out of licence fees, levy’s on

electricity sales and money

appropriated by Parliament.

Actor Functions/responsibilities Values Power

Uganda Electricity

Generation Company

Limited (UEGCL)

A daughter-formation of the South

African company Eskom Enterprises

(partial investor in UEDCL), called

Eskom Uganda Limited has been

attracted by the Uganda Electricity

Generation Company Limited (UEGCL)

in 2003 as the main investor to their

cause. Concerned only for large scale

hydropower projects, UEGCL operates

and maintains the two major

hydropower plants (180 MW and

200MW) in the nation, providing for

the majority of the entire electricity

production. The rest is produced by

privately owned production facilities,

or IPPs. The same as with UEDCL,

UEGCL has a concession agreement

for 20 years that started in 2005. On

similar grounds, EUL had to pay a fee

up front and pays monthly fees for use

of their assets, while getting a pay

check back for the sold electricity.

UEGCLs’ vision is to become the

Economical

Page 87 of 97

biggest power producer in the Great

Lakes Region, an area covering

multiple nations, surrounding Lake

Victoria and smaller lakes. Their

technical activities focus on O&M,

installing, restoring and completing of

the power stations, reviewing the

concession, surveillance of

surrounding structures (dams, civil

structures) at both power plants

(UEGCL sd). Business wise they have a

close relation between other sector

players, regulators and other

governmental agencies. They lobby

for and monitor changes in regulation

governed by the authorities which

affect their business (UEGCL sd).

Actor Functions/responsibilities Values Power

Uganda Electricity

Transmission

Company Limited

(UETCL)

Where the privatized distribution and

generation utilities in Uganda are

explained further on, the third organ

concerning transmission, the Uganda

Electricity Transmission Company

Limited (UETCL), is fully owned and

regulated by the government for the

time being. They govern over the

transmission lines above 33kV and are

thus responsible for the main grid.

Their task is to provide operation &

maintenance (O&M) on these lines

and serve as a system operator. UETCL

is solely responsible for the import

and export of electricity from and to

Kenya and Tanzania. (UETCL sd).

Economical

(Technological)

(Political)

Uganda Electricity

Distribution

The privatization of UEDCL, who owns

and governs over the electricity

Economical

Page 88 of 97

Company Limited

(UEDCL)

distribution network below 33kV, has

been a 20-year process in which a UK-

owned private investor, Umeme Ltd,

has been brought on board in 2005 in

order to stimulate foreign

investments, improving service

quality, expand the distribution

network and increasing access to

electricity for customers. Ownership

of Umeme is split between two British

enterprises, 46% by Eskom

Enterprises, and 54 % by Globeleq, a

subsidiary of the Commonwealth

Development Corporation, a financial

institute owned by the British

government. The current role of

UEDCL next to the responsibility of

distributing electricity, involves

administering to the Lease and

Assignment Agreement between

Umeme and UEDCL. This requires

Umeme to collect revenues from all

connected customers based on ERA

set tariffs, making obligated

investments in system rehabilitation

and reinforcement, pay monthly fees

to UEDCL for leasing the assets, and

when the lease ends after 20 years,

return all these assets. Other activities

of UEDCL involve the O&M of several

off-grid power stations until their

divestiture, supervising electrification

schemes, managing the pole

treatment plant in Kampala that

provides the distribution poles in

order to expand electrification,

maintain electricity distribution, and

therefore supply business in moments

Page 89 of 97

of early agreement termination.

UEDCL has exclusivity of the supply of

electricity within a distance of one

radial kilometre from the existing

distribution lines. Their obligation is to

provide service within this exclusivity.

Outside of the exclusivity zones, other

enterprises are free to supply

consumers with electricity (UEDCL

N/A). These distributing enterprises

are not coupled to the main grid.

Actor Functions/responsibilities Values Power

IPPs IPP’s are small (<20MW) producers of

electricity that sell to the transmission

company UETCL or to the end

consumers (UETCL N/A). IPPs that

obtained a licence from the ERA and

sell to the end consumer are required

to supply electricity and provide

supply lines for the area their licence

is valid for. In return, IPP’s are allowed

to require the consumers to pay fees.

This is similar to the obligations of

EUDCL, who is also obliged to provide

supply lines in the area where they

service.

Economical

Electricity Consumer

Committees (ECC)

In order to enhance consultation and

involvement, The ERA has established

formal committees called Electricity

Consumer Committees (ECCs). These

committees are seen across other

countries too, and are being rolled out

over the entirety of Uganda. The

function of them is to promote

consumer participation in order to

improve delivery and service of

electricity. They are based on

volunteers, consumers that comply to

Sociological

Page 90 of 97

a set of standards and are willing to

function as a channel for

communication between the

consumer and the authorities. A

member of an ECC should speak at

least English, consume electricity and

have spare time available to work part

time for this committee.

Through monthly meetings the ERA

hears the consumers complaints and

remarks as well as having the ability to

provide with information regarding

the utilities. The first ECC in Kampala

was established in 2007. Up to date

these committees have amongst other

things resulted in reduced energy

losses by issuing information on use,

and the processing and handling of

complaints (Electricity Regulatory

Authority 2014).

Uganda Energy

Credit Capitalisation

Company (UECCC)

A governmental body, the Uganda

Energy Credit Capitalisation Company

facilities investments for the

Renewable Energy Sector, in order to

attract and enable private sector

participation. Their services vary from

technical assistance to implementing

financial mechanisms for energy

projects. These financial mechanisms

reduce risks and interests rates on

bank loans. The UECCC has a priority

for Energy Efficiency – and Solar

projects (UECCC N/A)

Sociological,

Technological

Actor Functions/responsibilities Values Power

Foreign investors Seems to have a focus on large-scale

projects supplying to the national grid.

An example is the Chinese investing in

large nuclear power development and

Economical Economical

Page 91 of 97

the Eskomo, as a part of the UEGCL,

owning the large hydro power plants

in Uganda.

Foreign donors Organisations that are providing loans

or who are willing to invest in

electricity development (World Bank,

Deutsche Bank, etc.)

Sociological Economical,

Political

Electricity Consumers Consumers are the end-users of the

electricity consisting of different

groups with different demands;

Residential, enterprises, institutions

and industry, where the industry

currently is the largest consumer in

Uganda.

Social

Districts There are 111 districts in Uganda.

Each district is divided further into

counties and municipalities (Uganda

Bureau Of Statistics 2014).

Political

(with in each

individual

district)

Social

Political

Economical

Private companies Large and small, privately owned

electricity companies working with in

Uganda. Example of a large one is

Umeme power distributor and a

example of a small company is solar

producer BBOXX (BBOXX sd).

Economical Technological

Actor Functions/responsibilities Values Power

National Planning

Authority (NPA)

The governmental institution

responsible for the development of

Uganda.Conductor of the national

development plan (National Planning

Authority 2010).

Sociological Political

Developers &

Researchers

Universities and organisations who are

involved in developing the electricity

sector of Uganda. Example of

developers are Access2innovation, a

Danish company focused on

establishing cooperation between

different partners and IDEAS for

Uganda, who are a group of young

Sociological Technological

Page 92 of 97

volunteers working to develop

sustainable solutions for communities.

Example of researchers is the

University of Kampala who is involved

in education future engineers and

providing state of the art knowledge.

Tribes Uganda is home to 56 tribes that

speak different language and vary in

cultural heritage (My Uganda N/A).

Each tribe has there own king that has

a lot of power when it comes to

decision making inside the tribe (lbid.).

Although the tribes of Uganda are

uncharted territory in this report. It is

known that they possess political

power and tribe members of the same

tribe have similar values. Bonds

between tribe members even cross

national boarders (lbid.).

Sociological Sociological

Political

Other actors Actors involved in the electricity

sector but do not play a key role.

Ministry of Finance, Planning and

Economic development (MoFPED),

Ministry Of Water and Environment

(MOWE), Electricity Disputes Tribunal

(EDT), Ugandan Investment Authority

(UIA)

Political

Economical

Table 16 Actor identification. Functions, values and power

Page 93 of 97

Physical assests Exremely Poor Moderately Poor Self-sufficient Wealthy

Housing: Type of roof Thatched Thatched Iron sheets Clay tiles

Housing: Type of walls Mud and Wattle Un-burnt bricks Burnt bricksBurnt bricks with cement

mortat

Transportation Owns no bicycle Owns one bicycle Owns 2-3 bicycles Owns more than 3 bicycles

Communication Owns no mobile phone Owns one mobile phone Owns 2-5 mobile phonesOwns more than 5 mobile

phones

Information Owns no radio Owns one radio Owns 2-3 radio Owns more than 3 radios

Productive

LandOwns land up to a value of

UGX 1.000.000

Owns land between the

values of UGX 1.000.001-

Owns land up to a value of

UGX 10.000.001-

Owns land above the value

of UGX 100.000.000

Livestock: Cattle Owns up to 10 cattle Owns up to 11-20 cattle Owns up to 21-50 cattle Owns more than 51 cattle

Livestock: Goats Owns up to 5 goats Owns up to 6-10 goats Owns up to 11-20 goats Owns up to 20 goats

Fishing: Small Canoes Owns no small canoe Owns no small canoe Owns 1-2 small canoeOwns more than 3 small

canoe

Fishing: Large Canoes Owns no large canoe Owns no large canoe Owns one large canoe Owns two large canoe

Fishing: Nets Owns no nets Owns between 1-10 nets Owns 11-30 nets Owns more than 30 nets

Credit access Less than UGX 100.000 UGX 100.001-499.999Less than UGX 500.000-

999.999UGX 1.000.000 or above

Human

Work statusHousehold head

unemployed/subsistence

Household head

subsistence

Household employed, self

employd or pensioned

Household employed, self

employd or pensioned

Other

Food Consumption Has one meal per day Has two meal per dayHas at least two meal per

day

Has three meal per day or

more

Wealth Groups

Appendix 2 Poverty status, and how it is profiled in rural areas was accessed through a report made in 2011-2012 called “Kasese district Poverty Profiling and Mapping”. The drive behind this report was to strengthen the capacity of the Ugandan Government to design more effective poverty programs. The focus is on Kasese district in western Uganda. It illustrates a sufficient picture of a wealthy household and poor household in rural Uganda and how they are profiled (Renno 2012). Among the methods used to get poverty related data in this report was through structured interviews using quantitative questionnaire conducted at the household level in selected communities of the district. Furthermore key informants who consist of district leaders and technical staff as well as NGOs working in Kasese were interviewed (Ibid.). A total of 9.275 households were targeted by the survey and a composite wealth index used to categorize households into four main wealth groups (1) “extremely poor”, (2) “moderately poor”, (3) “self-sufficient” and (4) “wealthy”. The more assets a household owns the better able they are to secure regular income Table 1 shows the definition of each indicator per wealth group. To be classified in one of the four wealth groups household must submit with at least five of the indicators of each group (Ibid.). Tabel 1 Wealth group indicator

Page 94 of 97

13,5% of the households fall into the “wealthy” group, 31,2% of households are “self sufficient”, 41,7%

of the households are in the “moderately poor” wealth group and “extremely poor” households

represent 8,1% (Ibid.). Location and education are among the things that have impact on wealth. Poor

households (“extremely poor” and “moderately poor”) tend to live in rural areas and are likely to be less

educated (Ibid.). Education plays a significant part in development.

The figure above, Figure 2 show the benefits of electricity on education and GDP per capita (Kanagawa

og Nakata 2008).

Figure 2 (left) shows correlation between electricity consumption and GDP per capita. (right) shows correlation between electricity consumption per capita and education.

Page 95 of 97

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