Dubai-based utility investor Access MEA has agreed to construct a 10MW plant in northern Uganda — part of one of the largest independent solar power projects in Sub-Saharan Africa — through a local subsidiary named Access Uganda Solar.
The company, which has finalised deals to build 30GW of power in Middle East and African markets, was chosen from a list of seven bid offers to build, own and operate the solar photovoltaic facility in Soroti, 300km north-east of Kampala.
“It’s been months in the making. We were quite fortunate that [we] had the lowest tariffs,” Reda El Chaar, chairman of Access Power MEA, told The National. “There’s more money chasing projects [in the region] than actual projects.”
Access bid with a tariff of $0.164 per kilowatt hour (kWh) for 20 years — one of the lowest solar PV tariffs on the continent. The project will power 40,000 homes and help raise the proportion of Ugandans with access to power to 15%, according to the World Bank.
The plant is being in part funded by Uganda’s GET FiT programme, an initiative to encourage private investment to help develop 20 small scale renewable projects each year. Under the scheme, consumers will pay $0.11 cents per kWh, while GET FiT will cover the remainder.
“There’s never been a solar project like this in Uganda,” said Rene Meyer, secretariat of GET FiT, an organisation that has only recently branched out in solar.
El Chaar pointed to an emerging trend of investors paying more attention to smaller scale projects, and especially solar ones, to bypass the lack of infrastructure.
Last June, Access also reached an agreement to acquire 70% of a Rwandan company with a 25-year concession to process solid waste into agricultural-grade compost in Kigali.
“In addition to being quick to implement, solar projects can be built close to demand centres, thereby reducing transmission losses and stabilising the grid,” concurred Benon Mutambi, CEO of Uganda’s Electricity Regulatory Authority.
El Chaar added that it was the surety and the definitive timeline of the GET FiT programme that had given Access MEA the confidence to invest in the project.
The company will finish the financial deal by June and commence operations by the end of 2015, while the project could provide economical support for 80 to 100 households.
Across Sub-Saharan Africa, the World Bank estimates that a lack of power infrastructure hinders business productivity by about 40%, and is alleged to negatively impact the economy to the same extent as corruption, crime, bureaucracy and financial constraints.