Adopted from J.S. Held Africa Advisory
Kampala | Located in the heart of Africa’s Great Lakes region, Uganda is endowed with a rich landscape of plateaus, mountains, and abundant water resources. This natural beauty includes three of the continent’s largest water bodies – Lake Victoria, Lake Albert, and Lake Edward.
With additional smaller lakes and a section of the White Nile, water covers one-fifth of Uganda’s surface area. Among its many natural resources, Uganda’s potential for hydropower stands out as a significant opportunity for sustainable development.
Despite its vast energy resources, including biomass, solar, geothermal, peat, and fossil fuels, Uganda’s electricity access and consumption remain low. According to the Uganda Bureau of Statistics (2019), only about 50% of the population has access to electricity, with per capita consumption at just 215 kWh annually, far below the Sub-Saharan African average of 552 kWh. This highlights the urgent need for improved energy infrastructure to support economic growth and enhance living standards.
Hydropower forms the cornerstone of Uganda’s energy strategy. The country’s hydropower journey began in the mid-20th century with the construction of the Owen Falls Hydropower Station, which has since been upgraded and expanded.
By 2023, Uganda’s electricity generation reached 3,874 GWh, with hydropower contributing 87% of the total mix. This share is expected to rise to 92% with the commissioning of the 600 MW Karuma Hydropower Plant, set to significantly boost the nation’s energy capacity by the end of 2024.
Despite this progress, only about 15 percent of Uganda’s hydroelectric capacity has been utilized, with a technically feasible potential of 20,833 GWh per year and an economically feasible potential of 12,500 GWh per year. This indicates ample room for growth.
Uganda’s approach to hydropower involves large-scale projects along the Nile and numerous small and medium-sized hydro sites in the western and eastern regions. Small hydropower (SHP) projects, with capacities of no more than 20 MW, play a crucial role in meeting local energy demands and supporting isolated grids. Currently, there are 20 SHP facilities in operation, mostly owned and operated by independent power producers (IPPs), reflecting the growing trend of private sector involvement in Uganda’s energy sector.
Notable hydropower projects include Nyagak III, a 6.6 MW plant in West Nile developed through a public-private partnership. Genmax Nyagak Limited, a special purpose vehicle (SPV) formed by the Government of Uganda and a consortium comprising DOTT SERVICES LIMITED and Hydromax Limited, is set to commission the plant by the end of 2024. DOTT SERVICES LIMITED led the construction, while Tata Consulting Engineers served as the project engineer.
Nyagak III features a concrete dam with a desilting basin, a 1.3 km steel water conduit system, and a powerhouse accessible through challenging terrain. Once commissioned, it will supply the entire West Nile region alongside Nyagak 1, eliminating the need for thermal power generation. At USD 5.74 cents per kWh, electricity from Nyagak III is also the cheapest among mini hydropower projects.
Uganda is committed to expanding its hydropower capacity, identifying 59 mini hydropower sites with a potential of about 210 MW. These sites offer opportunities for isolated grids and grid-connected projects, further promoting energy access across the country. The government’s Renewable Energy Feed-in Tariffs (REFiT) policy encourages private investment in SHP and other renewable energy projects, fostering a favorable environment for sustainable development.
The sector is poised for significant growth, driven by strategic investments, public-private partnerships, and a commitment to harnessing renewable energy resources. The development of hydropower projects like Nyagak III underscores the potential for local and regional energy solutions, contributing to Uganda’s vision of a sustainable and energy-secure future
