A Decade of Lighting Nations Through Energy Infrastructure Development: Recounting Fruits of the Belt and Road Initiative

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By Allawi Ssemanda

On average, an African woman spend up to 5 hours per day collecting firewood. A study funded by Finnish ministry of foreign affairs on Modern Cooking Facility for Africa (MCFA) contends this prevents women and young girls from engaging in productive economic activities, school and at times exposes them to physical violence. MCFA attributes this challenge to lack of access to affordable and clean cooking facilities which can largely be explained by lack of electricity on the continent especially in rural areas.

Relatedly, the Word Bank (WB) indicates that approximately, one billion people from Sub-Saharan Africa and South Asia have no access to electricity. This indicates a huge barrier to socio-economic transformation of world’s significant population portion and has both direct and indirect effects on development efforts like hindering or slowing expansion of development indicators such as health, poverty reduction programs, education, food security among others.

However, infrastructure financing including energy infrastructure is a very expansive venture which involves huge amounts of funds. A study by the WB titled “why we need to close the infrastructure gap in sub-Saharan Africa,” underscores this stressing that infrastructure funding gaps are bottlenecks to Africa’s economic take-off. The African Development Bank (ADB) also stresses the need to reduce the region’s infrastructure funding gaps for the continent to achieve its development goals putting needed budget to $130-$170 billion annually.

Despite this, international creditors and commercial loans meant to fund such projects in developing countries have significantly reduced over a period. Other funders especially from the Western world are largely interested in funding areas like administration and so-called democracy programmes, leaving out key sectors like energy and transport infrastructures which are key for social economic development to be achieved. For example, World Bank which used to spend 70% of its funding in infrastructure significantly reduced this to about 30%.

In Uganda, the government has been working hard to increase electricity production capacity as a sure way to increase its accessibility countrywide and China has been a reliable partner in this endeavour with Beijing funding the country’s two major hydropower projects under the Belt and Road Initiative (BRI). Also, under the same arrangement, China is funding Uganda’s rural electrification program.

Through EXIM bank of China, Chinese government offered concessional loan to fund 85% cost of the Karuma Hydropower project, while Uganda government is meeting the remaining 15%.  A Chinese firm SinoHydro Cooperation is undertaking the project which is Uganda’s biggest hydropower plant and possibly, the 14th largest hydropower dam in the world. Upon completion, the project which is now 99.45% complete will produce 600MW which will push the country’s hydropower generation to 1,868 MW. The government hopes this will help the country to increase power accessibility countrywide reduce power tariffs in the long run.

Currently, 200 megawatts have been connected to the national grid. Upon completion, it will add 44.6% to Uganda’s increased power supply effectively helping more Ugandans to get connected and lowering power tariffs and advance the country’s goal of industrialization drive.

Isimba hydropower dam is another project funded and constructed by Chinese government still under BRI arrangement.  The dam which started its commercial operation in 2019 was formally handed to the Uganda government on 31st March 2019. As of May 2023, it had produced about 3.98 billion KWH generating approximately 165 million USD revenue to Uganda government. Today, Isimba power tariffs is at 4.16 cents per kilowatt hour (KWH).

Also, Uganda’s Rural Electrification program which aims at increasing the country’s access to electricity to is 90% on course. The program which is funded by Chinese government as a concessional loan is being implemented by a Chinese firm TEBA has already connected over 170,000 Ugandans in rural areas to national grid.  It is also under the BRI arrangement.

From Chinese experience, we learn that infrastructure development is key for any country to achieve its development goals. As Asia Development Bank chief, Jin Liqun once noted; “The Chinese experience illustrates that infrastructure investment paves the way for broad-based economic social development, and poverty alleviation comes as a natural consequence of that.” There is no doubt that China gives us a perfect case of what investing in infrastructure can do for countries seeking socio-economic development.  The good news is that as Beijing pursues building a community of shared future, it has been willing to share and support willing countries by investing in their infrastructure development as a way of backing their economic take off. BRI has been vital in this journey.

Uganda’s vision 2040 statement which seeks to see “a Transformed Ugandan Society from a Peasant to a Modern and Prosperous Country within 30 years” lists increased generation of affordable power as a magic bullet for the country’s socio-economic take off. To achieve this, Uganda must increase its electricity per capita consumption from the current 215 kWh to at least 3,668 kWh. This to happen, we must raise our power generation capacity to at least 41,738MW and increase access to national grid to at least 80%.

Considering figures and reality in the country, it is arguably incorrect one to talk about Uganda’s electrification program without mentioning China’s contribution. Through concessional loans under the Belt and Road Initiative, China has supported Uganda’s energy infrastructure sector right from Isimba to Karuma hydropower project and to Uganda’s rural electrification program. Given importance of this sector, by all means, China’s contribution to Uganda’s socio and economic development cannot be underestimated. As we mark 10 years of Belt and Road Initiative, as a Ugandan and African, I cannot shy to say China-Africa relations have produced real results and the cooperation is a textbook example of win-win cooperation and a positive effort towards building a community of a shared future for mankind in the new era.

Allawi Ssemanda is a Senior Research Fellow at the Development Watch Centre

 

 

 


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