(Bloomberg) -- Uganda is seeking $3.5 billion in private investment to expand its power-transmission network in attempt to curb spending without slowing its economic growth.
Liberalizing transmission will provide additional resources needed to transmit power from new generation projects including the 600-megawatt Karuma hydropower plant scheduled to start output in December, according to the electricity regulator. The capital injection, above the nation's current foreign reserves of $3.3 billion, would boost President Yoweri Museveni's aspiration of turning the prospective oil producer into an upper-middle income country by 2040.
The government sees an increase in demand for power from new industrial parks and its target of adding 300,000 customers to the distribution network annually over a decade. That would more than double the portion of the population with access to electricity to 60% in less than a decade.
“A new system has been established that opens doors to private investment,” Electricity Regulatory Authority Chief Executive Officer Ziria Tibalwa Waako said in a statement. “Through this public-private partnership, we envision simultaneous growth of the generation and transmission segments.”
Uganda increased spending by 17% in 2019-20, potentially widening its budget gap to 8.7% of gross domestic product from an estimated 5.8% in 2018-19. Increased public investment on transmission lines, roads and the reintroduction of a national airline could keep the East African nation's economic growth at 6.3% from 2018-19, according to the government's forecast.
READ: Uganda Power Company Warns Cost Cuts to Hurt Distribution Plan
--With assistance from Rene Vollgraaff.
To contact the reporter on this story: Fred Ojambo in Kampala at fojambo@bloomberg.net
To contact the editors responsible for this story: David Malingha at dmalingha@bloomberg.net, Chris Kay
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