By Jeff Mbanga
The African Development Bank (AfDB) has released a more detailed report of the funding needs for the South Sudan – Uganda power interconnection line, its associated substations and distribution lines, pointing to some key changes in both the cost and design of the project from what Uganda had earlier released.
The report into a project that is years behind schedule, notes that the total project cost is now close to $260 million, about $100m more than the $164.7m that Uganda had estimated in its Grid Transmission Study for the years 2023 to 2040, which was compiled by the Uganda Electricity Transmission Company Limited (UETCL).
The AfDB has promised to intervene with $155.2m of the project cost in loans and grants, according to its Appraisal Report for the Multinational South Sudan – Uganda Power Interconnection Project, dated November 2024. The European Union will also pick some of the tab with a grant of $27.1m.
The AfDB splitting of the funding will see Uganda receiving a loan of $121.9 million towards construction works within its side of the border, while South Sudan will receive a grant of $33.25 million.
Uganda will also come up with counterpart funding of $17.8 million towards the project.
AfDB also intends to give the Nile Basin Initiative – the organisation based in Kigali, Rwanda that will coordinate this project – a grant of close to $2 million.
Construction of this critical 400kV transmission line is expected to start in 2026 and concluded in 2029, according to the report, more than 10 years after the two countries agreed to put it up.
In December 2015, Uganda and South Sudan agreed to have a power interconnection line as the latter emerged from the ruins of a long protracted civil war. While some semblance of peace was ushered in, there were a few pockets of violence that needed to be dealt with to instill confidence in those that would undertake this power transmission project.
Just over two years earlier in Uganda, construction of the country’s biggest hydropower project – the 600MW Karuma dam – had started, and it was envisaged that there would be excess supply of electricity. Finding new markets for this electricity was critical.
If the project succeeds, it would loop in South Sudan into the East Africa Power Pool, an initiative that seeks to connect transmission projects among the countries within the regional bloc.
South Sudan desperately needs this power interconnection project with Uganda to work out. Africa’s youngest nation has the lowest rate of its population accessing electricity, at just five per cent (5%).
The country has an installed electricity generation capacity of 141MW, with demand estimated to be twice more than that, at over 300MW. To make matters tougher, a lot of the available 141MW is generated using the more expensive and dirtier heavy fuel oil.
South Sudan also has some institutional challenges within its set-up as the country lacks a regulatory body for its electricity supply industry. The Electricity Bill (2015), which would create the legal and governance framework of the sector and attract more independent power producers, is yet to be enacted.
Uganda, on the other side, has a different type of challenge on top of being cash-strained – the country is dealing with the headache of having too much installed electricity.
In September, the country commissioned its biggest hydropower station – the 600MW Karuma dam. However, only two units of the six – each with 100MW – have been connected to the grid. The other four were left out because there is just not enough demand to take up the electricity.
Getting South Sudan to take up some of this cleaner and cheaper electricity from Karuma is important to Uganda. Already, South Sudan has agreed to buy the hydro electricity at an estimated tariff of $9 cents per kWh, which is far cheaper than the cost of $37 cents per kWh from the fossil-fuel generators presently supplying the capital Juba.
According to Uganda’s draft Grid Development Study, electricity exports to South Sudan will be in the range of 45MW to 260MW when the transmission network is commissioned.
The two countries have to submit the signed Power Purchase Agreement, among other documents, to the AfDB to get the project rolling. The bank said it will soon write to its board to sanction the funding.
Uganda will receive the largest portion of this funding pool partly due to the length of the proposed transmission line and the associated sub-stations – a departure from what its government had earlier revealed.
On June 27, 2023, Uganda’s ministry of Energy and Mineral Development issued a press statement over a power sales agreement it had signed with the government of South Sudan for the power interconnection line that day, saying the line would run for 308km between the two countries.
The line, the statement added, would run 138km on the Ugandan side and 170km in South Sudan.
The design, it is now clear, has changed. According to the AfDB, the South Sudan – Uganda interconnection project will stretch for 299km, with Uganda accounting for 150km and South Sudan the remaining 149km.
The AfDB has also broken down the amounts of money it intends to spend on the different components of this project. The first component, which involves the construction of the entire transmission line, will cost $164.6 million. One company will be in charge of constructing the entire line.
The second component will cost $62.7 million. Under this component two new 400/132/33kV substations will be constructed – one in South Sudan at Gumbo in the outskirts of the capital Juba, and another in Uganda at Bibia in Uganda near the border with South Sudan, and integrating surrounding 33kV distribution network.
Under the same component, there will be an extension of the 400kV Karuma substation and upgrading of Olwiyo substation from 132/33 kV to 400/132/33 kV both of which are in Uganda. One company will be in charge of all the civil works under this component.
The last two cheaper components – the third and fourth – entail last mile connections around the region, and administration issues around institutional capacity building and project coordination.
AfDB estimates that it will make the first disbursement of the money towards the construction of the line in 2026.
