Published on 31/10/2025
Parliament has approved a loan worth US$121.96 million (UGX 425.02 billion) from the African Development Fund (ADF) to finance Uganda’s electricity export project to South Sudan, despite concerns over the country’s low domestic connection rates.
The approval followed a report presented by Bosco Ikojo, Chairperson of the Committee on National Economy, during the plenary sitting of October 30, 2025. The committee argued that the project, part of the South Sudan–Uganda Power Interconnection Project (SUPIP), will allow Uganda to trade 624 GWh of surplus power annually with South Sudan, while contributing to regional energy integration and reduction of greenhouse gas emissions.
Ikojo noted that Uganda continues to generate excess electricity that remains unutilized due to low domestic demand and inadequate grid-scale energy storage systems. “One of the key challenges in Uganda’s electricity sector is optimizing returns from the prevailing surplus generation capacity,” Ikojo told Parliament. “The project will strengthen the financial position of UETCL to expand access, maintain infrastructure, and support system development.”
Government figures indicate that only 25.3 percent of Ugandans are connected to the national grid, with just 15 percent enjoying reliable electricity supply. The committee contended, however, that the export arrangement would enable Uganda to earn revenue from idle capacity while addressing South Sudan’s power deficit.
A minority report tabled by Charles Tebandeke (Bbale County) and Hassan Kirumira (Katikamu South) opposed the loan approval, calling for the Power Purchase Agreement (PPA) between Uganda and South Sudan to be tabled before Parliament. “The contract terms governing this export remain a public secret,” Tebandeke said. “Before approving this loan, Parliament must see the memorandum and contract details, including the unit price at which power will be sold.”
The MPs further cautioned against Uganda’s growing appetite for borrowing, noting that nearly half of the national budget is already dedicated to debt management.
Uganda and South Sudan first signed an agreement in December 2015 to develop a 299-kilometre, 400 kV transmission line linking Olwiyo (Uganda) and Juba (South Sudan). Both nations committed to constructing associated substations, developing high-voltage operational capacity, and establishing frameworks for cross-border power trade and regional grid integration.
The decision sparked a heated debate among MPs. Rose Obigah (Terego Woman MP) described the move as “embarrassing,” arguing that it prioritizes foreign consumers over Ugandans still living without electricity, particularly in West Nile. “You forget about your people and prefer a neighbour,” Obigah protested. “Obongi doesn’t have a single electric pole. Yet we are borrowing to send power to South Sudan while communities in West Nile remain in darkness.”
Jonathan Odur (Erute South) echoed the demand for transparency, urging Deputy Speaker Thomas Tayebwa to compel the Ministry of Energy to present the PPA before any funds are disbursed. “We’ve entered bad agreements before and ended up paying heavy compensation,” Odur said. “Let us see this document before we make another costly mistake.”
Other MPs questioned why countries importing power from Uganda pay less per unit than Ugandans themselves. Siraji Ezama (Aringa County) called for tariff harmonization to ensure fairness. “It is ironic that those we supply pay less than we do,” Ezama said. “Before borrowing to extend power to others, we should first ensure our citizens are fully served.”
Naome Kabasharira (Rushenyi County) added that Uganda should equally invest in power distribution to address persistent load-shedding and reach unconnected areas.
Supporters of the loan, including Edson Rugumayo (Youth, Western Region), argued that the project will help Uganda recover costs incurred from paying for “deemed energy,” the financial burden of unused generated power. “By exporting surplus power, Uganda will cut losses and position itself as a regional energy hub,” Rugumayo said. “This is in our national interest.”
He added that Uganda’s installed capacity exceeds 2,000 MW, while domestic consumption remains below 1,000 MW, making export the most viable option for economic return.
However, Odur disagreed with Rugumayo’s argument that regional influence justifies the project, saying Uganda cannot boast of being a “regional power giant” while its own citizens remain unconnected. “There is no pride in being a big man of the region while your own people live in darkness,” Odur said.
According to the Ministry of Energy, the Uganda section of the project will cost US$139.8 million, of which the ADF loan will cover 87.2 percent (US$121.96 million), while Uganda will contribute US$17.85 million (12.8 percent) in counterpart funding.
The ministry maintained that the initiative will help reduce financial losses from unused power generation, promote regional energy security, and strengthen economic ties between Uganda and South Sudan.
