The new policy is part of the solar power component of the Energy for Rural Transformation (ERT) programme, a 10-year plan that aims at increasing access to electricity in rural areas. The programme is an initiative of the Ministry of Energy & Mineral Development and the Private Sector Foundation of Uganda (PSFU), an association of businesses, corporate bodies and major public sector agencies that support private sector growth, plus nine donor agencies. It is funded by the Rural Electrification Fund of Uganda, the World Bank (the international quasi-public bank) and the United Nations Development Programme (the UN’s global development network), as well as MFIs.
Only 5% of Ugandan households have access to electricity according to government figures, and only 3% do in rural areas, despite the formation of the REA in 2001. The target is to reach 10% by 2012.
So far solar power has made little headway in Uganda, as current devices are expensive, with the smallest solar lantern (5 watts) costing USD 88-147 in a country where four out of 10 people live on less than a dollar a day. Through the new scheme, private solar equipment suppliers will be encouraged to invest in rural areas, thereby meeting the ERT goal of achieving 80,000 new connections by 2010. In the past six years, the government has installed less than 10,000 solar systems.
Participating MFIs will receive credit lines from the REA, as well as direct subsidies for solar system customers (MFIs). There will also be grant advances for those wanting to enter the solar equipment market or to expand within it. For customers there will be a one-stop application process for REA subsidies, public-private sector grants and credit from MFIs, using one consolidated application form.
Amy Rennison, MicroCapital Writer
Additional Sources:Microfinance Gateway: http://www.microfinancegateway.org/content/article/detail/43568
Symbiotics: http://www.symbiotics.ch/en/rss_microfinance.asp?id=b653
East African: http://www.nationmedia.com/eastafrican/current/Business/Business2409078.htm
