Uganda grid-based Output Based (OBA) Facility

Uganda grid-based Output Based (OBA) Facility

My siblings and I lost everything that we had during the Lord’s Resistance Army (LRA) war. Without a source of income to live on, life was very difficult for us in the Internally Displaced People’s (IDP) camp. But OBA turned our lives around. After getting connected under the project, I was able to start a small restaurant, selling pork and juice. My business has since picked up. With part of my savings, am able to keep my younger siblings in school.

Agnes Aber an OBA customer uses electricity to make and cool juice to sell in Pabbo, Amuru District

CONTEXT

Despite its high hydro potential, Uganda remains one of the poverty-stricken countries characterized by low access of its population to modern energy services like electricity. Power shortage remains one of the greatest obstacles to the country’s economic growth. On average, only 20% of the country’s population has access to electricity. That number drops to an estimated 7% in rural areas. To address this challenge and in full recognition of the strategic role that can be played by electricity in socio-economic development, the Government has during the last ten years pursued comprehensive power sector reforms. The investments in the distribution infrastructure have so far not resulted in a significant uptake in electricity connections, especially among poor households. Investments in the distribution infrastructure alone are not sufficient in promoting electrification. One key factor in the electrification equation is the connection cost, i.e. the actual cost charged by distribution companies to connect a customer, as well as the cost for house wiring. These costs are currently prohibitively high for most Ugandan households. The absolute minimum wiring costs for households is estimated at about USD 90 for a small house and connection costs at USD 200. These expenditures are well beyond the average monthly income of a household which is less than USD 50. These households will remain unconnected to the electricity grid, irrespective of its availability in their neighbourhood. The results of different surveys across the country reveal that only around 25% of the households connect initially after a grid reaches their area. This number increases over the next years but only seldom reaches the original projections. Clearly, a key reason for the low connection rates is that the households are not able to pay the connection fees.

OBJECTIVES

  • The objective of the investment programme is to provide access to energy to poor rural, peri-urban as well as urban households throughout Uganda by subsidising the connection costs. As part of the programme, at least 132 500 households will be connected to existing grids over the course of 4.5 years.

RESULTS

  • The project has the potential to produce development impacts at different levels:
  • Households are expected to benefit from more efficient lighting.
  • Reduced household expenditure (on inefficient alternative sources of lighting such as candles and kerosene lamps).
  • Reduced indoor pollution and improved access to information through radio and TV, among others.
  • Provision of lighting is expected to give women an opportunity to earn additional income by working at home in the night.
  • Children will be able to read at night, without the negative impact of inadequate illumination on their eyesight.

FACTS AND FIGURES

  • The project aims to connect 132 500 households
  • 655 000 beneficiaries

TESTIMONY

Abel Okech – OBA beneficiary and father to Okello Nelson, Akena Alfred and Aketo-Wanga Susan

"Before the coming of OBA, we were using Kerosene lamps and torches for lighting. Buying paraffin on a daily basis was both expensive and tiresome. The danger of a fire accident constantly loomed over us given that our house is roofed with grass.

"Today, OBA has made it possible for us to access a safer and better source of lighting. My expenditure on energy has reduced as compared to what I used to spend on paraffin. In all this, nothing warms my heart more than seeing my children studying and breathing in cleaner indoor air. I have also noticed a steady improvement in their academic performance."