Jubilee is buying an additional 9.44% shares (worth $40 million) from Bujagali Energy, the owner of the Bujagali Falls Hydropower Dam in Uganda
Jubilee acquired 9.44% of Bujagali Energy additional shares in Uganda, which owns the 250 MW capacity Bujagali Dam. Despite the difficulties faced by the entire sector, the insurer expects a steady and steady return on investment.
- Jubilee is paying an additional $40 million worth in shares to Bujagali Energy
- Uganda is seeing an increase in electricity exports
- The 250-megawatt Bujagali hydroelectric dam is located on the River Nile in Uganda
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Insurance company Jubilee Holdings has bought an additional 9.44% stake in Bujagali Energy Limited (BEL) in Uganda. The move, which cost $40 million, brings the company’s Jubilee holding to 18.24%. These additional shares are owned by energy company SN, which is the main owner of BEL, with 55.45% stake.
“We are delighted by this additional investment in the Bujagali Hydro Dam and hope that the investments will remain stable and steady return on investment as it has in all our previous investments,” said Nisar Zuma, Jubilee Leader.
The 250-megawatt Bujagali hydroelectric dam is located on the River Nile in Uganda. The plant was built for $900 million through a combination of loans and equity.
Infrastructure provides 50% of the country’s energy. However, the high cost of producing this energy is a major problem in the Uganda electricity industry.
Also, the plant faces financial difficulties in repaying the loans it has contracted for its construction. This is a situation the government is trying to solve with the support of many partners, including the World Bank.
Uganda is seeing an increase in electricity exports
Uganda’s total electricity demand has been increased in other countries’ electricity demand.
Data from Uganda Electricity Transmission Company Limited (UETCL) indicates that the demand for electricity from exports was slightly higher than the domestic market.
System power demand, which declined from 588.52 MW in April to 639.87 MW, was recorded in May.
However, domestic demand in May increased by 564.78 MW compared to 543.6 MW in April.
This indicates that domestic demand has increased by 21.18 MW compared to 30 MW in exports.
Uganda exports electricity to Kenya and Tanzania.
Increasing export demand is not unusual, as it varies depending on the situation in neighbouring countries.
However, Kenya Power and Lighting, the country’s electricity and distributor, issued a warning to its shareholders that the Kovid-19 would result in slower growth due to slower growth in electricity sales.
“This is due to challenges facing the western part of Kenya. They have an exchange control in that area, so they want to get power from us,” Mr Valentin Katabira, CEO of UETCL , explained the reason for the increase in demand.
On the other hand, the data also indicates that domestic demand has been growing since the fall in April due to locked-in measures to prevent the spread of Kovit-19.
Despite a marginal increase, demand is still much lower than the pre-COVID-19 period of 728 MW.
The increased demand for electricity has a positive effect on tariffs and reduces the country’s loss in capacity payments to power producers.
Currently, the president has allowed public and private vehicles to operate but maintained the curfew at 7 pm.
This continues to limit work hours, especially for power producers who consume more than 60 per cent of the country.
Impact of COVID-19 on electricity
According to the Electricity Regulatory Commission, the postponement of emergency operations in the power sector may have affected the reliability of the power sector.
“There were also issues of reliability. The average duration and frequency of crashes were halted because we only handled emergency care, and all planned operations were suspended,” said Mrs Syria Tibalwa Waako, CEO of ERA.
New customer connections have also been discontinued to reduce public contact.
According to the ERA, this has led to an increase in illegal connections, which has contributed to electric accidents and energy losses.