By Spy Uganda
Parliament has approved a loan worth US$121.96 million (UGX 425.02 billion) from the African Development Fund (ADF) to finance Uganda’s electricity export project to South Sudan, despite growing concern over the country’s low domestic electricity connection rates.
The approval followed a report presented by Bosco Ikojo, Chairperson of the Committee on National Economy, during the plenary sitting on October 30, 2025. The committee argued that the initiative — part of the South Sudan–Uganda Power Interconnection Project (SUPIP) — will enable Uganda to trade 624 GWh of surplus power annually with South Sudan, while advancing regional energy integration and reducing greenhouse gas emissions.
Ikojo explained that Uganda currently generates more electricity than it consumes, with significant capacity going unutilized due to limited domestic demand and insufficient grid-scale energy storage.
“One of the key challenges in Uganda’s electricity sector is optimizing returns from the prevailing surplus generation capacity,” Ikojo said. “The project will strengthen the financial position of UETCL to expand access, maintain infrastructure, and support system development.”
According to government data, only 25.3 percent of Ugandans are connected to the national grid, and just 15 percent enjoy reliable electricity supply. The committee, however, maintained that exporting surplus energy would generate revenue from idle capacity while helping to bridge South Sudan’s power deficit.
A minority report by Charles Tebandeke (Bbale County) and Hassan Kirumira (Katikamu South) opposed the loan, insisting that the Power Purchase Agreement (PPA) between Uganda and South Sudan should be tabled before Parliament.
“The contract terms governing this export remain a public secret,” Tebandeke said. “Before approving this loan, Parliament must see the memorandum and contract details, including the unit price at which power will be sold.”
The dissenting MPs also warned against Uganda’s increasing dependence on borrowing, noting that nearly half of the national budget is already committed to debt servicing.
The debate over the project turned heated, with several MPs accusing the government of prioritizing foreign consumers over Ugandans still living without electricity.
Rose Obigah (Terego Woman MP) described the move as “embarrassing,” saying it neglects communities such as West Nile, where many areas remain off-grid.
“You forget about your people and prefer a neighbour,” Obigah protested. “Obongi doesn’t have a single electric pole, yet we are borrowing to send power to South Sudan.”
Jonathan Odur (Erute South) echoed calls for transparency, urging Deputy Speaker Thomas Tayebwa to compel the Ministry of Energy to table the PPA before any disbursement of funds.
“We’ve entered bad agreements before and ended up paying heavy compensation,” Odur cautioned. “Let us see this document before we make another costly mistake.”
Other MPs questioned tariff fairness, arguing that countries importing Uganda’s electricity often pay less per unit than local consumers.
“It is ironic that those we supply pay less than we do,” said Siraji Ezama (Aringa County). “Before borrowing to extend power to others, we should first ensure our citizens are fully served.”
Naome Kabasharira (Rushenyi County) added that Uganda should invest equally in power distribution infrastructure to tackle persistent load-shedding and expand access to unconnected areas.
Supporters of the loan, including Edson Rugumayo (Youth, Western Region), defended the project as a pragmatic move to turn Uganda’s surplus power into economic gain.
“By exporting surplus power, Uganda will cut losses and position itself as a regional energy hub,” Rugumayo said. “This is in our national interest.”
He noted that Uganda’s installed generation capacity exceeds 2,000 MW, while domestic consumption remains below 1,000 MW, leaving a substantial amount of unused power — often referred to as “deemed energy” — that the government continues to pay for.
However, Odur dismissed Rugumayo’s argument, saying Uganda cannot claim regional leadership while millions of its citizens remain unconnected.
“There is no pride in being a big man of the region while your own people live in darkness,” Odur remarked.
Uganda and South Sudan first signed the power interconnection agreement in December 2015, aiming to construct a 299-kilometre, 400 kV transmission line linking Olwiyo (Uganda) and Juba (South Sudan). The project also includes substations, high-voltage capacity development, and frameworks for cross-border power trade.
The Ministry of Energy estimates that the Uganda section of the project will cost US$139.8 million, with the ADF loan covering 87.2 percent (US$121.96 million) and Uganda contributing 12.8 percent (US$17.85 million) as counterpart funding.
The ministry insists the project will reduce financial losses from unused power generation, enhance regional energy security, and deepen economic cooperation between Uganda and South Sudan.
