Electricity News

UK’s Gridworks To Invest $90m In Uganda’s Electricity Transmission

Nankabirwa (R) after signing the agreement with Gridworks executives (L) on the sidelines of the Africa Energy Forum

Following an agreement with the government of Uganda, Gridworks, a UK development and investment platform will provide up to $90 million in equity funding for the refurbishment of various substations in Uganda to help address the capacity constraints at four important spots on the national grid.

Earmarked for an upgrade are the Tororo, Nkenda Mbarara and Mirama substations, in a first-of-its-kind project where private investment will go towards supporting the development of Uganda’s transmission sector.

The refurbishment of the four substations had been identified as priorities by the Uganda Electricity Transmission Company Ltd (UETCL) in its latest Grid Development Plan.

“The government wants to promote safe, reliable and sustainable electricity supply and facilitate stable regional electricity trade. By increasing investment in our electricity grid, we will be able to unlock suppressed demand; boost industrialisation and power our export sector. This pilot will be helpful in establishing a successful model that can be duplicated to catalyse further investments in the sector,” said Ruth Nankabirwa, Uganda’s Minister of Energy and Mineral Development.

According to World Bank figures, from 2010-2020, only 7.5 per cent of global private electricity infrastructure investment was targeted at sub-Saharan Africa. Of this, 98.2 per cent funded electricity generation projects, with less than 0.3 per cent funding transmission projects.

“Transmission infrastructure is essential for economic growth, electricity access, sustainable power networks and a green energy transition. There is a huge need for funding of Africa’s electricity networks. That need will be met more quickly if we create sustainable business models that attract private sector capital and expertise,” said Simon Hodson, CEO of Gridworks while pledging to be at the forefront of private investment in transmission as a recognisable asset class in Africa.

While Gridworks will develop and finance the project, Siemens will undertake the upgrade work on the four substations.

Gridworks is wholly-owned by the British International Investment (BII), the UK’s development finance institution and impact investor. Created in 2019, BII established the platform with a mandate to provide patient capital to develop on-grid and off-grid electricity transmission and distribution infrastructure across Africa.

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Deep Earth International critically examines developments in the extractive and energy sectors in Uganda and the wider East African region. Drawing from the vast experience of its founders who have each covered and written about these sectors for at least fifteen years, this website is the go-to platform for anyone seeking to get a better understanding of the same.

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