Page 6 - EPSI Magazine Issue 8 final 2018.indd
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               This process was not unique to Uganda            shedding across the country. Computing the cost
          alone, globally many countries driven by the then     of Aggreko generators, one knew that that was the
          selling slogan of “Governments have no business       wrong  way to meet  our power  needs. There  was
          being in business” often times propagated by the      renewed and increased appetite to get the more
          Red Brick Institutions embraced to varied levels      long-term private sector on board in Uganda.
          the process of restructuring and/or privatization
          of several of their public utilities, among other         Some of our neighbors also took a similar route
          entities. Uganda at the time in the good books of     varying only in extent. Tanzania took to privatized
          several of these institutions and just coming out     management contract but abandoned this when
          turmoil of war, with limited resources for most its   it did not generate the desired impact – they have
          infrastructure rehabilitation saw privatization as a   since stayed with the vertically integrated TANES-
          viable solution.                                      CO. Kenya on the other hand created Kenya Elec-
                                                                tricity Generation Company for generation from
               A Public Enterprises Restructuring and Di-       Kenya Electricity Generating Company Limited
          vestiture law (the PERD Statute) was enacted and      (which retained distribution) and eventually set up
          the process started under the supervision of the      Kenya Transmission Company for bulk transmission
          PERD Committee comprising mainly of the rele-         and system operation. Kenya while keeping major-
          vant Ministers and Permanent Secretaries with a       ity shareholding with government allowed private
          Secretariat dubbed the Privatization Unit, directly   sector and individuals to have ownership in these
          supervised by the Ministry of Finance, Planning       entities mainly through the Nairobi Stock Exchange.
          and Economic Development.
                                                                    By all measure Uganda took the deeper extent
               For Uganda, a more compelling reason was         in getting private sector involved as generation,
          the national need to have power for the econo-        transmission and distribution became separate
          my  which showed strong  tendencies  for  elec-       business entities.
          tricity driven economic recovery when govern-
          ment completed the rehabilitation of Nalubaale        Outcomes of Unbundling UEB for
          Power Station astride the Owen Falls Dam in the       Uganda:
          mid-nineteen nineties. Rehabilitating it from a
          mere 60MW nominal capacity and enhancing                   The unbundling of UEB, a then inefficient par-
          it beyond its 1954 designed capacity of 150MW
          to 180MW and completion of the new extension          astatal heavily dependent on subsidies from the
                                                                national treasury, was done under provisions of
          (Kiira Power Station – using the shared excess wa-    the Electricity Act 1999 enacted through the na-
          ters coming from the Owen Falls Dam) bringing         tional Parliament. The unbundling sought to stem
          on board 200MW. This looked like a drop in the        the need for treasury subsidies to UEB, create more
          ocean compared to the anticipated need.  The
          needed resources to cover the gap were not small.     focused and efficient business units and attract pri-
                                                                vate sector to invest in the generation and distri-
          Hence attracting private sector to bring some of      bution segments of the sector to free government
          the capital investment required was quite attrac-     funds for other national needs. These two do not
          tive. Private sector itself were attuned to the large   have monopolistic attributes as transmission and
          investment opportunities presented.
                                                                system operator, which remain in a corporatized
                                                                government entity.
               To remove any doubt on the need for private
          sector participation, a drought set in around the
          same time that privatization was taking place.        Entities Created by Unbundling UEB
          Water levels prevented both Nalubaale and Kiira
          Power  Stations  from  generating  optimally.  By           The process yielded six entities each with
          2003/4 Uganda was relying on very expensive           unique mandates, a distinct Board of Directors and
          emergency power supplied by the Aggreko Com-          Managing Director or Chef Executive Officer:
          pany generators to address 4 days a week load
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