THE African Trade Insurance Agency (ATIDI) has pledged crucial support for the 20 MW Ituka West Nile Uganda Ltd solar project, in collaboration with Independent Power Producer (IPP) AMEA Power. Announced during the 28th Conference of the Parties to the UN Framework Convention on Climate Change (COP28) in Dubai, this partnership underscores a significant commitment to sustainable energy initiatives.
Manuel Moses, CEO of ATIDI, expressed gratitude to AMEA Power, stating, ‘I thank AMEA Power for serving as catalysts for energy independence in Uganda. Our recent collaboration with IPPs in Uganda is not just about power generation; it’s about empowering communities, driving economic growth, and fostering a sustainable future.’
Aqueel Bohra, Senior Director – Project Development at AMEA Power, highlighted the importance of the support received, saying, ‘Investing in renewable energy in Uganda is part of our pledge to deliver sustainable energy to all. Our solar project will not only help provide essential power to homes and industries but will also drive economic growth, creating jobs, and safeguarding the environment.’
The partnership involves ATIDI leveraging its Regional Liquidity Support Facility (RLSF) to provide payment guarantees for the benefit of the Ugandan national power utility, Uganda Electricity Transmission Company Limited (UETCL). This initiative aims to mitigate risks and ensure project resilience in Uganda’s dynamic sustainable energy landscape.
Under the RLSF policy, which spans an initial tenor of 15 years, the IPP will receive coverage for up to six months’ worth of revenue. However, the finalisation of the RLSF policy is contingent upon both parties reaching a mutual agreement on the policy documents.
The electricity generated by the solar power plant will be sold to UETCL through a 20-year Power Purchase Agreement (PPA). Once operational, the project will integrate into the national grid via a new high-voltage transmission line managed by UETCL.
The RLSF initiative, spearheaded by ATIDI, KfW Development Bank, and the Norwegian Agency for Development Cooperation (Norad), serves as a liquidity instrument safeguarding renewable energy IPPs against delayed payments by public offtakers. This collaboration marks the initiation of Phase 2 under RLSF, building upon the success of Phase 1 that supported five renewable energy projects in Burundi, Malawi, and Uganda.
Uganda has shown significant progress in increasing electricity access rates, reaching 42 percent from a mere 12 percent in 2010. However, the country’s reliance on hydro-powered projects makes it susceptible to climate change impacts during prolonged droughts, necessitating diversified energy sources.
The collaboration between ATIDI and IPPs in Uganda aligns with the nation’s vision to diversify its energy mix and promote sustainable development, marking a transformative step toward a more resilient and sustainable future.