DEAL! Museveni Government Unveils Investor Ready to Inject $100m in Gas Factory

CLEAN ENERGY

Ugandan representatives and an investor are in advanced stages of formalizing a deal aimed at fast-tracking transition from use of firewood and charcoal to cleaner cooking gas, the ministry of energy and mineral development has revealed at the ongoing COP28 in Dubai.

Prime Minister Robinah Nabbanja is leading Uganda’s delegation at the climate summit. On November 30, Minister Ruth Nankabirwa launched Uganda’s Pavilion at COP28 in Dubai. Sheikh Shakhboot Bin Nahyan Al Nahyan represented the UAE government at the launch.

Key entities including those involved in the importation of fossil fuels and those engaged in efforts for the drilling of Uganda’s oil – even as activists push for a phase-out – are present at the pavilion. Entities which have sent representatives at the summit include the Petroleum Authority of Uganda (PAU), Uganda National Oil Company (Unoc), Electricity Regulatory Authority (ERA), Uganda Investment Authority (UIA) and the Uganda Development Bank (UDB). These are expected to use two weeks of COP28 to exhibit what the country’s response to climate change and approach to climate action.

In January 2023, the energy ministry signed a memorandum of understanding with Global Gases Group for the gas project, that will also see the company use municipal, organic and animal waste to generate fuel.

Global Gases Group is a supplier of gases and associated products to offshore oil and Gas, healthcare and other markets.

Uganda has this partnership on the top list of interventions it is showcasing in its COP28 paviliion.

Global Gases Group has assured Kampala it is ready to invest $100 million (nearly Shs380bn) to establish an LPG factory. Minister Nankabirwa said the deal was almost complete. What is pending is for the finance ministry to issue a certificate of financial implication. One of the conditions for the project is that the Ugandan government must off-take LPG cylinders before the commencement of implementation.

Days before the beginning of COP28, Inclusive Green Economic Network – East Africa (IGEN-EA) detailed the barriers to clean cooking energy access in Uganda and called for action to address the challenges in a petition to minister Nankabirwa.

In 2023, President Yoweri Museveni issued an executive order banning tree cutting for commercial charcoal production as a way of preserving the environment. Yet access to clean energy remains low across the country.

According to findings from the 2019-2020 Uganda National Household Survey conducted by the Uganda Bureau of Statistics (UBOS), only 19 per cent of households have access to grid electricity. Up to 27 per cent of households use solar kits for lighting while 11 per cent use solar home systems for more functions.

The same survey indicated that up to 94 per cent of Ugandan households use biomass, including charcoal and firewood, for cooking. Up to 73 per cent of the households use firewood for cooking and 21 per cent use charcoal for the same purpose. As of 2018, the UN estimated that 10.7 million Ugandans out of a total population of 46.8 million used charcoal to prepare their meals.

“Charcoal and firewood are used because they are accessible, reliable, and affordable, though charcoal prices have increased in recent years. Access to firewood has also become increasingly difficult in some areas of Uganda,” IGEN-EA wrote in its petition signed by Dickens Kamugisha, the CEO of the Africa Institute for Energy Governance (AFIEGO).

Although the energy ministry is encouraging Ugandans to use LPG to reduce households’ reliance on biomass, and when 22 per cent of the population can afford LPG at the household level, the network further noted, about one per cent use it “due to negative attitudes, safety concerns, difficult access, and the high initial cost of purchasing the cylinders.”

It should also be noted that Museveni’s government has recently been on the spot for signing deals with controversial companies, including one fined for corruption to control the monopoly of the importation of Uganda’s fuel (petroleum products), and a bankrupt Russian firm to supply expensive digital number plates for all vehicles in the country. (See Details Here and There).

You can read top stories from our coverage of COP28 in Dubai Here, There and Over There.

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