By Spy Uganda
Uganda’s accelerating industrialisation is beginning to reshape the country’s electricity needs, with government now warning that power generation must expand faster to prevent future shortages as factories and other large consumers continue to come online.
Trade, Industry and Cooperatives Minister Sanjay Tanna said Uganda’s rapidly growing industrial base could place increasing pressure on the national electricity system if new generation capacity does not keep pace with demand.
Tanna made the remarks on Tuesday during a meeting between Prime Minister Robinah Nabbanja, government officials and members of the Presidential CEO Forum at the Office of the Prime Minister in Kampala.
The meeting focused on the progress of government interventions aimed at addressing concerns raised by private-sector leaders on issues affecting investment, industrial production and the cost of doing business.
Uganda has made significant investments in electricity generation in recent years, substantially increasing installed capacity.
Data from the Electricity Regulatory Authority (ERA) shows that the country’s installed generation capacity stood at about 2,098 megawatts by the end of 2025, up from 1,362MW in 2021.
Hydropower accounts for the largest share of the generation mix, with about 1,722MW, while the remainder comes from cogeneration, solar and thermal sources.
However, electricity consumption is growing at a faster pace as industrial and commercial activity expands.
Uganda’s maximum electricity demand rose to 1,345.3MW in December 2025, representing a 20 per cent increase from 1,117.9MW recorded a year earlier.
Domestic demand alone increased from 973MW to 1,166.2MW over the same period.
The figures suggest that while Uganda currently maintains a generation capacity buffer, the margin could narrow considerably if demand continues growing at its current rate.
For government, the concern is less about an immediate shortage and more about ensuring that future industrial growth does not outpace investments in generation and transmission infrastructure.
The growing manufacturing sector is expected to remain one of the biggest drivers of future electricity demand.
International Energy Agency data indicates that industry accounted for about 67 per cent of Uganda’s final electricity consumption in 2023, highlighting the close relationship between industrial expansion and energy demand.
Tanna said the country could not afford to wait until demand exceeds available supply before investing in additional generation.
He argued that Uganda must anticipate the power requirements of new factories, industrial parks and other major investments currently being developed or planned.
Prime Minister Nabbanja acknowledged the growing demand for electricity and said expanding supply remains among the government’s priorities as the country seeks to accelerate industrialisation.
Uganda has already undertaken major investments aimed at increasing electricity production.
The commissioning of the 600MW Karuma Hydropower Plant and the 183MW Isimba Hydropower Plant significantly increased the country’s generation capacity.
Karuma, now Uganda’s largest single generating facility, has added substantial capacity to the national grid and is expected to support industrial and economic expansion.
But the latest demand figures suggest that generation alone will not be enough. Continued investment in transmission and distribution infrastructure will also be required to ensure that additional electricity reaches factories and businesses reliably.
The warning was delivered during a meeting convened to assess how government has responded to concerns raised by the private sector through the Presidential CEO Forum.
The forum, established at the initiative of President Yoweri Museveni, provides a platform for chief executives and government officials to discuss policies and challenges affecting investment and national development.
The forum has raised issues ranging from energy and infrastructure to financing, taxation, exports and the overall cost of doing business.
Nabbanja said continued engagement between government and the private sector had contributed to addressing some investment bottlenecks and supporting the establishment and expansion of industries.
National Planning Authority Executive Director Dr Joseph Muvawala also welcomed government investment in export guarantee financing, saying the initiative could help Ugandan companies expand their presence in international markets.
The meeting was attended by Third Deputy Prime Minister Rukia Nakadama, Minister for General Duties Hillary Onek, Minister for Karamoja Affairs John Baptist Lokii, senior government officials and Presidential CEO Forum Chief Executive Officer Irene Mugisha Birungi.
The government and private-sector representatives agreed to continue monitoring interventions in energy, infrastructure, exports and industrial development.
For Uganda, the emerging challenge is increasingly about staying ahead of its own economic success: as more factories are established and production expands, the country will need to ensure that its power system grows at a pace capable of supporting that transformation.
