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The Electricity Act, 1999, Cap 145, Laws of Uganda was enacted to govern the activities of the Electricity Supply Industry. The Act provides for the establishment of an Independent Regulator with the mandate to regulate the generation, transmission, distribution, sale, export, import and distribution of electrical energy in Uganda.
The enforcement of the Electricity Act 1999, is supplemented by Statutory Instruments and Guidelines approved by ERA. Other organs such as the Electricity Disputes Tribunal, the Rural Electrification Agency (REA) and Board (REB) were established under the Act to provide guidelines for resolution of sector disputes, and promote, support and provide for rural electrification programs respectively.
The legal and regulatory framework for the Uganda energy sector is complimented by a policy framework that includes the energy policy, which was completed in 2002 and the renewable energy policy which was completed in 2007.
Section 93 of the Electricity Act, Chapter 145, Laws of Uganda provides for the establishment of an Electricity Disputes Tribunal. By statute, the jurisdiction and primary objective of the Electricity Disputes Tribunal is to hear and determine all matters referred to it relating to the electricity sector. This includes electricity disputes between consumers and licensees charged with generation, transmission and distribution of electricity in Uganda and disputes between electricity sector players in exercising her functions; Electricity Disputes Tribunal has powers of the High Court of Uganda.
The detailed complaints and dispute resolution procedure is provided for under regulation 21 of the Electricity Primary Grid Code.
One of the functions of the Electricity Regulatory Authority is to issue licensees for the generation, transmission, distribution or sale of electricity and licenses for the ownership or operation of transmission system.
Interested power project developers can invest in Uganda’s electricity sector through a solicited or unsolicited licensing process.
- Solicited Licensing Process
The Electricity Regulatory Authority, through a fair, open and competitive process in accordance with procedures prescribed under the Electricity Act and supporting regulations, invites applications for licenses to generate electricity.
- Unsolicited Licensing Process
Licensing of Independent Power Producers (IPPs), under the unsolicited route goes through a two tier process which includes:-
- The feasibility permit stage; and,
- The licensing stage (construction and operation).
- The feasibility permit stage is the first stage in the unsolicited licensing process. Intending power project developers require a permit from ERA to undertake feasibility studies and any other activities that require other relevant consents and approvals, often from the environmental regulator, the National Environment Management Authority (NEMA) and water regulator, the Directorate of Water Resources Management (DWRM).
Once granted a feasibility study permit by the Authority, the permit is valid for a period of 18 months. This feasibility study permit allows the intending developer exclusive rights over a particular energy generation resource in a given area.
Construction and operation
Once the intending developer has concluded the feasibility studies and acquired the relevant and necessary consents or approvals, they may apply to ERA for a Generation and Sale of Electricity License. The license is valid not more than 40 years although the typical license validity period is 23 years. The validity period includes the time it takes to construct the power generation project.
It is upon the award of a Generation and Sale of Electricity License that an intending developer is legally permitted to undertake project development.