First Oil Timeline and Energy Reforms: Minister Nankabirwa Outlines the Road Ahead
World Business Journal talks to Hon. Ruth Nankabirwa Ssentamu, Minister of Energy and Mineral Development, about the Petroleum Supplies Act, modern cooking solutions, UEDCL’s future after the Umeme buyout, first oil production timelines, and the upcoming licensing bidding round.
What prompted the amendment of the Petroleum Supplies Act to make UNOC the sole importer, and what effects has this had on fuel supply and prices?
The key objectives of amending the Petroleum Supplies Act to designate UNOC as the sole importer were twofold. First, the amendment aimed to maintain a steady fuel supply in Uganda, particularly during periods of political unrest, as the previous dependence on intermediaries frequently resulted in Ugandan OMCs (Oil Marketing Companies) receiving less priority. This change has successfully guaranteed product availability nationwide.
Second, the amendment aimed to reduce fuel prices by eliminating unnecessary layers that inflated costs. This goal has also been met, with pump prices decreasing.
What is the latest on the Clean Cooking Unit and efforts to shift Ugandans to modern cooking fuels?
The Clean Cooking Unit, under the Renewable Energy Department, led by Dr. Brian Isabirye, is operational but still developing. Its focus is on facilitating the transition from traditional cooking methods to modern ones, addressing challenges in adaptation. Many Ugandans, even those with electricity, still rely on charcoal due to stigma and fear surrounding alternatives like Liquefied Petroleum Gas (LPG).
The unit has organised exhibitions to demonstrate modern cooking techniques and promote the benefits of these technologies. The government has subsidised these clean cooking solutions, making them affordable. Subsidies vary, with some technologies at 30% and others at 40%. This initiative is part of a $638M World Bank loan, which will be utilised over 4 years, starting this year.
What advantages will the shift from UMEME to UEDCL offer?
UEDCL is transitioning away from the previous Umeme model, which operated on a 20% return on investment. The transition is expected to bring significant benefits, including lower electricity costs, improved reliability, and better service quality.
The government will provide $50M in funding for the first year, with plans for this support to continue over the next 5 years.
UEDCL will also seek a joint venture partner to inject expertise and capital into distribution improvements.
Is the oil and gas sector on track to meet the target for first oil production in 2025, and will the third licensing round still take place in June 2025?
Due to global challenges and financing delays, we have adjusted our expectations for first oil production to 2026 or early 2027, while still proceeding with the third licensing round this year, focusing on the Moroto Basin, Lake Kyoga Basin, and Hoima Basin.
What is the status of the grid stability study and floating solar panels?
The grid stability study and the evaluation of floating solar panels are set to be finalised by Q3. The grid study will help determine how much additional load the national grid can support, addressing current limitations in distribution infrastructure for last-mile connections. This is vital for integrating solar energy and mini hydropower projects.
For floating solar panels, we are receiving investor applications, but we need to complete our study first. This involves consultations with stakeholders, particularly regarding shared water bodies like Lake Victoria. Once finalised, we anticipate a significant increase in solar installations in these water bodies.
