Uganda’s Energy Future

In Uganda, the energy access situation is dire. About 80% of the population lives in rural areas, and only 7% of these citizens have access to electricity, the rest relying on firewood, charcoal and paraffin for their daily energy needs. Where the electricity grid reaches Ugandans, the price of electricity is too high, both for ordinary citizens and for manufacturers and small and medium enterprise owners.

Hydropower: good for investors, not for the people

The Ugandan government has been betting on hydropower as the solution. 26 hydropower stations have been built up to date, and more are in the planning. While hydropower energy is cheap in other countries, it is expensive in Uganda: as the government keeps the tariffs high to satisfy investors, the electricity already generated can not be afforded by most users – given they are connected to the grid.

And contrary to what many think, hydropower dams are far from a clean and fair source of energy. Construction of hydropower dams leads to displacement of communities who lose their homes, fertile lands and access to water. Dams result in complete loss of productive river systems, including fisheries on which people rely for food. Furthermore, hydropower's impact on the climate should not be underestimated: dams result in release of greenhouse gases, destroy forests, and deprive ecosystems of nutrients.

Oil and gas: private gains, local burden

In addition, Ugandan government is investing large sums of money into oil and gas extraction. In 2006, commercially viable oil was discovered in the Albertine Graben region, and foreign companies such as the French TotalEnergies and the Chinese National Offshore Oil Corporation (CNOOC) have signed agreements with the government to extract oil in this eco-sensitive area.

The construction of the 1,445 km long East African Crude Oil Pipeline (EACOP) through heavily populated districts, to transport the oil from Uganda to a port in Tanzania, will have a profound negative impact on the environment and people's livelihoods. Thousands of households would have to be relocated, threatening land and water rights. Oil spills would threaten clean water sources, fish availability, and biodiversity. Human rights violations have already been observed in the region during the initial exploration stage, as evidenced by two reports by Oxfam International and the International Federation for Human Rights.

Financial system supports false solutions

In times of an urgent climate crisis, fossil energy sources are clearly not the way to go, and neither are hydropower projects which still fail to make affordable energy accessible for the majority of Uganda's population. Nevertheless, investments from various actors – including public investors - are mainly targeted at these false solutions. Development banks are taking an active role in promoting hydropower as an energy source for Uganda. For example, the African Development Bank and the World Bank have invested in the highly controversial Bujagali dam, while the Dutch development bank FMO invested in over 8 hydropower projects in Uganda. The Dutch export credit agency Atradius DSB provided insurance for the construction of Achwa I Run-of-River hydropower project, while the UK's export credit agency invested in Kabaale International Airport, linked to the EACOP pipeline. Most Dutch pension funds are invested in TotalEnergies and/or CNOOC, which are the primary oil and gas developers in Uganda.

Towards a sustainable and inclusive energy future for Uganda

So instead of fossil and hydropower energy, Uganda needs an energy strategy that respects people and planet and it needs international investors such as development banks, pension funds and energy companies to invest in sustainable energy projects that start with the needs of local communities.

One promising renewable energy source in Uganda is solar power: the country receives about 8 hours of sunshine per day throughout the year. Off-grid solar energy is the ideal model for Uganda in order to provide rural and remote communities with economical and reliable energy access. Therefore, our partners in Uganda raise community awareness about the benefits of solar energy and on supporti campaigns to increase investment in off-grid solar energy. Together, we also advocate for a solar energy policy by the Ugandan government, to guide which areas in Uganda should be appointed for off-grid solar energy investments, how this should be financed and to define standards for off-grid solar energy products.

Parallel to the work our partners do in Uganda, Both ENDS encourages investors from the Netherlands and the EU like pension funds, development banks and export credit agencies to divest from any fossil fuel related activities, to be careful with hydropower dams and instead invest in off-grid solar energy projects, respecting human rights, international regulations and the environment. Besides, they should use their leverage to encourage the Ugandan government to stop its approval of harmful projects and instead put in place a solar energy policy and affordable power tariffs.