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POLICY position that, for this allocation, Eskom and regulatory outcome.
should remain the buyer.” An integral part of Uganda’s Electricity
Nersa support Eskom as once the New Generation Regulations had regime that has enabled gradual growth of
In determinations that follow in future, and Regulatory Framework is the strict licensing
buyer of IPP output been amended, municipalities could take part the electricity supply industry, one that has
in establishing new generation, it added.
become easily predictable, where investors
The National Energy Regulator of South Nersa noted that a large number of know what to expect.
Africa (Nersa) says that Eskom should stakeholders, including the City of Cape Town While some business executives come
remain the buyer of the electricity produced and the City of Johannesburg, indicated that with colourful proposals, promising heaven-
by independent power producers (IPPs) the opportunity to buy electricity should be on-earth power generation projects, where
and procured by the Department of Mineral expanded to allow municipalities to also be the megawatts to be produced are huge, they
Resources and Energy (DMRE) in line with a buyers of their own power. have found a calm and collected team at the
new Section 34 Ministerial determination for “Once the unbundling of Eskom has Electricity Regulatory Authority (ERA), which
11 813 MW of new generation capacity. been completed and all decisions regarding does not fall easily to manipulation. Many of
The regulator recently concurred with the the role of the system operator and the those executives and their proposals have had
determination and on September 22 published appropriate placing of the mandate to buy to abort their missions.
its reasons for that decision. power for the system has been outlined, future The Electricity Regulatory Authority insists
Nersa sad noted that the Energy determinations will take this into account as that the days of speculators and rent-seekers
Regulator had taken the decision to concur well.” in Uganda’s electricity supply industry (ESI)
with the determination, delivered to it by are over, and that investors must show legal,
Mineral Resources and Energy Minister technical and financial capacity to handle the
Gwede Mantashe in late February, on July projects they are fronting. Electricity being
29. Mantashe confirmed receipt of the POLICY a critical factor in Uganda’s industrialisation
concurrence on September 10. journey, powering businesses - both small
Nersa noted that several stakeholders had Uganda set for 19 new and big - ERA ensures that the developers of
raised concern over Eskom, which is in a weak power projects can prove they can pull them
financial position, continuing to play the role power projects off.
of the buyer of IPP-produced electricity, while
others had outlined several preconditions for Uganda’s electricity generational capacity is
retaining Eskom as the buyer, including the set to go up with new official figures showing
need for National Treasury guarantees and a more developers undertaking feasibility INVESTMENT
commitment from the utility that generators studies than ever before.
would be connected to the grid. As of September 2020, there are 19 AFC’s Inaugural CHF150mn
The regulator noted the conditions proposed power projects at permit stage
highlighted by stakeholders, but said the in different parts of the country, whose green bond to finance
issues must be ironed out during engagements developers are undertaking feasibility studies
in the procurement process. for the proposed projects, according to the Africa’s sustainable
“[For] example, the issue of government latest figures from the Electricity Regulatory
guarantees should be handled by the DMRE, Authority. The current proposed power development
the Department of Public Enterprises and the projects are more than the six at the same
National Treasury. This will also be shared stage a year ago. Africa Finance Corporation (AFC) has
with Eskom and the DMRE or the IPP Office.” Uganda’s Electricity Regulatory Framework announced the successful issuance of its
Nersa said the upcoming changes in the was for the second time in a row ranked No. inaugural CHF150mn green bond under the
electricity sector, including the unbundling 1 in the Electricity Regulatory Index (ERI) for Corporation’s $5bn Global Medium-Term
of Eskom and amendments to the New Africa, released by the African Development Note (“GMTN”) programme.
Generation Regulations, would be important Bank in November 2019. The first edition of The issuance is also the Corporation’s third
considerations when determining the decision the index was published in June 2018 covering CHF-denominated bond. The Bond has a
on who the buyer should be in future. 15 countries, where Uganda ranked No. 1. tenor of five years, carries a coupon of 1.205%
“However, given that neither of these Uganda scored favourably on the aspects of and is listed on the SIX Swiss Exchange.
processes have been finalised, it is Nersa’s regulatory governance, regulatory substance The Bond is rated A3 by Moody’s

Week 38 24•September•2020 www. NEWSBASE .com P11