Evaluating the Techno-economic impact of private sector-driven expansion of Uganda’s Transmission Grid

Abstract

The transmission grid is managed by the Uganda Electricity Transmission Company Limited (UETCL) a government-owned entity, tasked with the development, operation, and maintenance of Uganda’s high-voltage transmission grid (HVTG) responsibilities from generation sites to distribution networks. With the increasing electricity demand,limited access to the grid, significant increase in transmission losses, rising from 3.7% to 4.82% over the past five years,and the aging transmission infrastructure, there is a need to expand the transmission grid to the underserved areas. UETCL designed a roadmap, The Grid Development Plan for the phased expansion of the grid from 2018 to 2040. However, even with such efforts, there are still delays in implementation of these projects due to limited public funding so the Electricity Regulatory Authority (ERA)drafted the Electricity Amendment Act (2022) that broadens the potential for private sector involvement and Independent Power Transmission (IPT) guidelines to follow for the operation of the transmission grid under different ownership models. This study evaluates the techno-economic viability of private sector involvement in expanding Uganda's electricity transmission grid, focusing on two key projects from the national Grid Development Plan: the Mbale-Bulambuli-Kween project and the Nkenda-Hoima-Fort Portal 220kV upgrade. The methodology involved identifying viable transmission lines, modelling the Ugandan network to integrate proposed private sector lines, and performing detailed technical and economic analyses, including system losses, voltage stability, equipment loading, power flows, and cost-benefit assessments. Project selection was based on criteria such as inclusion in national plans, strategic time frame, high strategic value (power evacuation and load centre access), historical delays in government funding, financial viability, and technical simplicity. The results indicated that some of the upgrade equipment anticipated to be used reduced the transmission losses averagely by 0.5%. Economically, the Mbale-Bulambuli-Kween project is highly viable, demonstrating a positive Net Present Value (NPV), a short payback period of 6 years, while the Nkenda-Hoima-Fort Portal 220kV upgrade shows technical improvements, it currently presents a negative NPV and underutilized assets, suggesting it is not yet financially viable under existing demand conditions. The study concludes by recommending updated load forecasts, phased commissioning, appropriately sized transformers and alternative financing mechanisms are recommended to improve its financial viability. This research provides an integrated techno-economic framework and provides a crucial tool for evaluating future Independent Power Transmission (IPT) projects, ensuring efficient and beneficial private sector participation in Uganda's grid expansion.