[{"bbox": [85, 155, 323, 186], "category": "Section-header", "text": "# 2 RATIONALE"}, {"bbox": [85, 221, 234, 247], "category": "Section-header", "text": "## 2.1 Context"}, {"bbox": [97, 268, 175, 292], "category": "Section-header", "text": "### Country"}, {"bbox": [97, 319, 1134, 744], "category": "Text", "text": "Uganda is facing a high population growth, insufficient investments in social sectors, high unemployment and pressure on natural resources. Uganda's population is currently estimated to be 45.9 million (annual population growth of 3.3 %) of which 84 % is considered rural and about 50 % under 15 years of age. It is estimated that Uganda's population will grow to over 60 million in 2030 and 100 million in 2050. Moreover, Uganda hosts more than 1.4 million refugees resulting mainly from long lasting armed conflicts in neighbouring Democratic Republic of Congo and South Sudan adding pressure on environment, natural resources and social services. With fertile soils and regular rainfall, agriculture is the most important sector of the economy, employing over 80 % of the work force. In particular, 68 % of women's main activity is agriculture.¹ The Covid-19 pandemic has exacerbated socio-economic problems, increasing poverty and inequalities, in particular for women. According to the World Economic Forum's annual Global Gender Gap report for 2022, Uganda ranks 61st in the Global Gender Gap Index and 73rd in the Economic Participation and Opportunity sub-index.² The lack of prospects for youth is a key driver of conflict. There is shrinking space for civil society organisations (CSOs), human rights defenders and environmental activists. Government's fiscal space has narrowed despite a GDP increasing growth (5.5% expected for 2023) driven by investments in the oil and gas sector and return to normality after Covid-19. Public debt saw a sharp rise, leading to a shift from low to moderate risk of debt distress. The IMF extended credit facility of USD 1 billion approved in July 2021 is currently under review."}, {"bbox": [97, 772, 227, 796], "category": "Section-header", "text": "### Energy sector"}, {"bbox": [97, 823, 1134, 1115], "category": "Text", "text": "The grid only services 19% of the population and more than 45% continue to lack access to modern, clean and sustainable sources of electricity, with women and girls being the most adversely impacted. It is estimated that 34% of the population would have reached an access to electricity through off-grid solutions, mainly via solar home systems. Regarding cooking, 95% of the population relies on biomass, either firewood or charcoal, what is responsible for alarming rates of deforestation, losses of biodiversity and soil erosion. On the transmission side, the network has expanded over 50% in the last two decades, but is still unable to cover the country's needs (important disparities persist between regions). Interconnections with neighbouring countries remain inexistent with the exception of Kenya. Grid losses average 16.4%. The national electricity demand is growing at a steadily annual rate of 8% reaching already a peak of 863 MW, however the average consumption of electricity per capita remains amongst the lowest in Africa. The installed generation capacity is 1253 MW but availability is below 80% what results in frequent outages³ and/or the need to run the Namanve thermal power plant (50 MW heavy oil)."}, {"bbox": [97, 1141, 1134, 1248], "category": "Text", "text": "Nalubaale (180MW) and Kiira (200MW) Hydropower plants (NKHPP) are both located on the River Nile in Uganda about 3 km from its source, Lake Victoria. The plants are run-off river and operate in parallel. They are a key facility for energy generation in Uganda as theoretically represent 30% of the total generation installed capacity."}, {"bbox": [97, 1274, 1134, 1433], "category": "Text", "text": "Without major rehabilitation, Nalubaale Power station is possibly at the end of its lifetime whereas Kiira is still in a reliable operating condition but limited in part load operation. Both HPPs are owned by the public company Uganda Energy Generation Company Limited (UEGCL). Both power plants are fundamental as they regulate discharges from the Lake Victoria, the second largest freshwater lakes of the world and the main source of the Nile River, which has a length of 6 695 km. Therefore, millions of people on the shorelines of Lake Victoria and the Nile River water bassing are affected/dependant on the waters level and flow regulated by NKHPP."}, {"bbox": [97, 1462, 1134, 1542], "category": "Text", "text": "The feasibility study for the rehabilitation of NKHPP was concluded in 2019 with support from the German government. It indicated that the generation units at NHPP are in very poor conditions reducing the plant reliability and increasing the chances of failure and forced outages in near future. The Consultant's assessment also"}, {"bbox": [85, 1577, 1100, 1601], "category": "Footnote", "text": "¹ United Nations, Department of Economic and Social Affairs Division, \"Statistical Yearbook 2022 edition\", New York, 2022"}, {"bbox": [85, 1601, 621, 1625], "category": "Footnote", "text": "² World Economic Forum, Global Gender Gap Report 2022, July 2022."}, {"bbox": [85, 1625, 1142, 1647], "category": "Footnote", "text": "³ A serious incident at Isimba hydropower plant (180MW) in August 2022 resulted in at least one month of load-shedding and recurrent outages."}, {"bbox": [1038, 1682, 1143, 1706], "category": "Page-footer", "text": "Page 4 of 20"}]