1. Implementing Power Rationing Programs The Tanzania and Uganda Experience Karen Rasmussen (AFTEG)

2. Uganda Power System Characteristics 300MW installed hydropower capacity +50MW leased Thermal (April 2005). $95 million turnover, sales of about 1112 GWh ; 300,000 consumers. Peak demand: 370MW; base load demand 270MW. Leader in (African) power sector reform.

3. Challenges: Energy constraints & the high cost of imported fuel 5% of the population has access to electricity. Private sector surveys: power supply is major impediment to sustained investment and growth. Planned 200MW Bujagali Hydropower Project terminated in 2003. 50% of energy sent out is paid for.

4. Challenges (continued) Chronic and unabated load shedding during the past decade. Lake Victoria: 3 year drought; declining water levels impacting hydro generation output (macro, sectoral and environmental impacts affecting not only Uganda but other Riparian States, negatively influencing the transportation, fisheries, water supply and agriculture sectors). High cost of thermal generation (land locked, transport and fuel logistics).

5. Possible Issues/Causes Lack of timely investments Political Aspects; affordability Prohibitive cost of thermal plant (Govt. pursued electricity imports from Kenya, DSM, auto-generation, time of day tariffs)

6. Potential Solutions Short to medium term : Additional thermal plant - lease and permanent for hydro complementarity Regional Interconnection (EAC) Accelerate geothermal investigations and renewable (bagasse and hydro) co-generation projects.

7. Tanzania System Characteristics Small power system (850MW); $160 million turnover; sales of about 4,000 GWh; 600,000 consumers. Predominantly hydro-dependent until 2004. Bank financed project to develop gas for power generation and industrial use (commissioned in 2004). Power sector reform in nascent stage.

8. Challenges: Coping with Capacity and Energy Constraints About 8% of the population has access to power. Chronic pattern of load shedding (1994, 1997, 2000 and 2003). Thermal plant expensive to run (utility cash flow issues). 2003 drought and Government Program to transition out of it: --75MW gas based plant (private sector). --Short term IDA assistance (financing of kWh) -- Convert 100MW IPTL plant to gas firing by end 2005. -- Mitigating steps: DSM, hydro/thermal optimization, IPP strategy and standardized documentation.

9. Challenges (continued) Load shedding cycle returns in 2006. IPTL Power Plant not yet converted (end 2007 target date). TANESCO (power utility) in poor financial situation; tariff increases not forthcoming. Government solution is to procure (public) gas based generation plant.

10. Possible Issues/Causes Poor planning. Lack of timely investments. Wishful thinking (it will rain). Political Aspects: Presidential elections; electricity tariffs do not reflect the cost of supply.

11. Potential Solutions Leadership/political will to deal with the fundamental causes and not the symptoms. -- Develop a comprehensive power sector reform plan (legal & regulatory framework). -- Optimize hydro/thermal dispatch. -- Develop a mitigation plan (DSM, power rationing program).

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