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GET FiT Leveraging Private Investment for Renewable Energy in East Africa

This project aims to remove barriers for renewable energy financing. “GET FiT: Leveraging Private Investment for Renewable Energy in East Africa” works to improve the capacity and practice of regulatory agencies, thus enhancing the environment for private investment in small-scale renewable energy projects. Opening up private investment in renewable energy development intends to ensure the place of renewables in the energy mix. It could also provide a more robust electrical grid for rural populations and businesses.

Fast facts:

  • USD 375 million in private financing to be leveraged
  • Approximately one to five public-to-private funding ratio
  • Expected to increase Uganda’s energy production by 20 per cent
  • Expected to improve energy access for 900,000 Ugandans

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The problem

Although Uganda restructured its power market to feature a fairly progressive regulatory environment for private sector investment, various challenges still confront potential private investors. Since 2010 the REFiT program has offered significant improvements to the first-generation of REFiT in 2007. Nonetheless shortcomings remain. Most significantly, the standardized power purchasing agreements with back-to-back, bankable implementation agreements are lacking.

The solution

GET FiT leverages private financing (and a limited amount of grant funding) for the development of small-scale, on-grid renewable energy generation projects. Standardized power purchase agreement templates are being revised, to bring them in line with the best international practices. Associated parties, like the Electricity Regulatory Authority and the Uganda Energy Transmission Company Limited, are learning from the process, including increasing their capacities and improving their practices.

By removing key hurdles to private investment in renewable energy, the program intends to help Uganda maintain renewables in the energy mix, decentralize the production of power, and enhance the electrical grid in remote regions.

Helping the planet

Greenhouse gas emissions will be avoided through the development of renewable energy, adding to the fight against climate change. Less dependency on fossil fuel will reduce other forms of pollution. Likewise, the environmental destruction associated with the extraction of fossil fuels like coal and oil will be reduced.

Helping people

This project should produce enough additional power for almost a million Ugandans. Through the use of a diversified energy portfolio, the project hopes to make electrical grids more stable, particularly in remote regions. A stable power supply not only means rural Ugandans will not have to rely on pollutive and dangerous forms of lighting like kerosene lamps, but also allows rural businesses to grow.

Spillover effect

A technology-neutral approach allows countries to tailor the renewable energy mix to their own specific needs. For example, in Uganda the project portfolio is heavy on small-scale hydropower. In other countries technologies such as biogas could take a more predominant role. Flat-rate premium payments reduce the potential for manipulation, making for a system that is simpler, more trustworthy and potentially more easily replicable. The project also incentivizes the selection and development of the best project sites as quickly as possible, making it attractive in comparison with other options.





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