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Norway’s Jacobsen Elektro is waiting for the government to decide on renewal of the power purchase agreement (PPA) for its 50MW heavy fuel oil power plant near Kampala. Managing director Roar Millehaugen told African Energy the plant’s original PPA expired on 15 September 2014, but the company had agreed a six-month extension to March 2015, and was now awaiting a decision on the renewal. The government has the right to take over ownership of the plant, but would have to first repay Jacobsen for loans set up when finance for the project was first arranged, although the amount is undisclosed.

Two consortia bidding to build a 60,000 b/d refinery near Lake Albert submitted final bids in December, and an announcement is expected soon. African Energy understands that, having initially favoured the Russian bid, the Ugandan government, or more particularly President Yoweri Museveni, is now backing the South Koreans because of US and EU sanctions relating to the former.

The World Bank Group is considering a $100m International Development Association loan to support government plans to develop the national grid. The grid expansion and reinforcement project (Gerp) supports developments under the Uganda Electricity Transmission Company Ltd (UETCL) grid investment plan, which the World Bank estimates will require around $2bn of investment in the transmission network between 2013 and 2020. The Gerp will complement the $130m Uganda Energy for Rural Transformation III electricity distribution project, which is set to go before the World Bank board by June. The Gerp is expected to go before the board in October.

Two consortia have been selected to build, own and operate two solar photovoltaic (PV) power plants with a total capacity of 20MW, under the pilot Global Energy Transfer Feed-in Tariffs (GET FiT) programme (AE 289/8). Uganda’s Simba Telecom in partnership with Italy’s Building Energy and a consortium of Access Power MEA of the United Arab Emirates and Spain’s TSK Electronica will build the country’s first solar projects in the Tororo and Soroti districts in eastern Uganda, at a combined cost of $32.5m, the Electricity Regulatory Authority (ERA) announced on 10 December.

Uganda is planning a licensing round next year, and the Ministry of Energy and Mineral Development is evaluating bids from consultancy companies to assist with the process. Ministry principal geologist Fred Kabanda told Global Pacific & Partners’ Africa Oil Week conference in Cape Town on 5 November that despite the exploration successes of recent years, the Albertine Graben was only 40% explored, and plenty of prospectivity remained. Many areas had been relinquished, sub-commercial discoveries had been returned to the government, and many identified leads and prospects had not been drilled.

The government has launched a third, and probably last, request for proposals (RfP) under the pilot Global Energy Transfer Feed-in Tariffs (GET FiT) programme. To date, a total of 13 renewable energy projects with a combined installed capacity of 108.5MW have been approved by GET FiT, following two tenders in 2013-14 (see table, page 9). The current RfP was launched on 10 November with the aim of supporting a further 60-80MW of capacity. The closing date is 23 January, with the next group of developers expected to be selected in June 2015.

The government has approved the disbursement of UGSh955bn ($366m) from the state budget to finance construction of the 600MW Karuma and 183MW Isimba hydropower projects, according to a report in the local daily New Vision on 8 September. The release of funds was approved at a cabinet meeting chaired by President Yoweri Museveni in late August, following a report on the progress of the two projects by vice-president Edward Ssekandi, the report said. It quoted an unnamed government source as saying that the government decided to release the funds to avoid interruption of the works at the two sites on the Victoria Nile, which, contrary to reports, was on track.

Uganda’s Tax Appeals Tribunal has ruled in favour of the Uganda Revenue Authority (URA) in its dispute with Tullow Oil over capital gains tax (CGT) owed for the company’s 66% farm-down of its Lake Albert assets to CNOOC and Total. Following completion of the $2.9bn farm-down agreement in February 2012, the URA issued Tullow with a $472m CGT assessment, which the company contested, although it paid the requisite 30% on the assessment (equivalent to $142m) in order to launch the appeal.

Two consortia from Russia and South Korea will proceed to the final phase of bidding for a contract to build a 60,000 b/d refinery near Lake Albert, the Ministry of Energy and Mineral Development said on 24 June. The ministry said in statement that a consortium led by South Korea’s SK Energy and another led by Russia’s RT Global Resources had submitted qualifying bids by the 30 May deadline.

UK private equity firm Actis has completed a two-part sale of shares in Ugandan distribution utility Umeme in a deal worth $98m. The transaction saw Actis give up its position as largest shareholder with the sale of 45.7% of the utility’s shares. South Africa’s Investec Asset Management is now the single biggest holder of Umeme shares with 18.47%, while Umeme Holdings Ltd, Actis’ investment vehicle, retains 14.3%, and Uganda’s main pension fund National Social Security Fund increases its interest to 14.27%. The $85m institutional tranche was heavily oversubscribed and closed on 14 May.

The Ministry of Energy and Mineral Development announced on 4 June that it had received four bids for construction of a 60,000 b/d refinery in Hoima, near Lake Albert. The government and transaction adviser Taylor-DeJongh will now begin a month-long evaluation of bids, after which results will be announced, a ministry statement said. Negotiations are expected to be concluded by Q4 2014. “The evaluation criteria will include, but not be limited to, the overall technical experience and financial capacity and the development, financial and commercial plans submitted by the bidders,” said refinery project manager Robert Kasande.

Final bids for construction of an oil refinery in Hoima district are due by 30 May following requests by bidders that the deadline be pushed back. Originally, this was set for April, but following requests for more time by shortlisted candidates, the Ministry of Energy and Mineral Development agreed to an extension. The lead investor should be selected by September, according to the ministry. Disputes over refinery size have caused development of the Ugandan oil sector to slow. Tullow Oil, alongside upstream partners Total and CNOOC, has argued that a smaller 30,000 b/d refinery would be most economic.

Tullow Oil has opted to relinquish the Ngassa oil and gas discovery within Exploration Area 2 after apparently concluding that further work on the geologically complex structure was uneconomic. Tullow carried out exploration and appraisal drilling between 2007 and 2009, but a statement from the Petroleum Exploration and Production Department within the Ministry of Energy and Mineral Development said further work was needed to enable understanding of the key reservoir parameters such as estimates of oil in place, net pay and sand connectivity.

Days after private distributor Umeme posted profits of USh84bn ($32.9m) for 2013, a substantial increase on 2012’s USh57bn, parliament has asked the government to terminate the company’s 25-year concession, as well as recommending that Eskom Uganda should lose its concession to manage the 200MW Kiira and 180MW Nalubaale hydropower plants. Specifically, the Ad Hoc Committee on Energy’s report on the performance of the electricity subsector suggested both Eskom and Umeme had exaggerated their investments in the country. “More than ten years after the reforms in the power sector were carried out, the generation capacity at the main Kiira-Nalubaale hydropower plants dropped from a high of 270MW.

A memorandum of understanding (MoU) signed by the Ugandan government and its upstream partners on 5 February paves the way for oil production to begin by setting parameters for the development of sector infrastructure. This includes the construction of a refinery on the shores of Lake Albert, construction of a pipeline to export crude to Kenya’s coast, and development of a power plant to run on petroleum. Tullow said the agreement covered integrated development of the upstream, an export pipeline and a 60,000 b/d refinery to be developed in a modular manner starting with 30,000 b/d. The government is expected to select a lead investor to develop the refinery by the end of H1 2014.