The African Development Fund (ADF), the concessional lending arm of the African Development Bank Group (AfDB), has approved $153.66 million in loans and grants to Uganda and South Sudan to implement an electricity interconnection project between the two neighbouring East African countries.
ADF will provide $119.21 million to Uganda, and a grant of $32.50 million to South Sudan for the project which is being built at a total of $260 million. Additionally, the European Union is providing a grant of 48.93 million euros to South Sudan, while the Ugandan government committed to allocate $17.44 million for the project.
According to the AfDB, the objective of the project is to integrate South Sudan into the East African Power Pool network to address electricity shortages and problems associated with reliability and affordability of electricity supply in South Sudan. The project will also provide surplus generating capacity on the Ugandan market and will expand electricity trading between Uganda and South Sudan.
The interconnection project to improve energy trade
The interconnection will enable exchange of average 624 GWh of energy between the two countries each year, reducing greenhouse gas emissions and improving access to electricity for 286,710 people in South Sudan.
Furthermore, the interconnection will reduce kilowatt-hour tariffs for end users in South Sudan, in line with the recommendations of a study into the cost of electricity service. It will also create at least 50 permanent jobs (including 15 for women) and 1,000 temporary jobs (including 300 for women) during the construction and operation phases of the project.
The interconnection project will involve construction of a 299-km electricity interconnection between Gumbo village, near Juba (capital of South Sudan), and Olwiyo in Uganda (149 km in South Sudan and 150 km in Uganda); construction of two new 400/132/33 kV substations, one at Gumbo and the other at Biba on the border with Uganda; and the expansion and upgrading of the Karuma and Olwiyo substations.
In addition, the project will include the installation of distribution networks and 1,000 last-mile connections; project administration and management; capacity building and joint coordination, including a study of the cost of electricity services for South Sudan; and, finally, a resettlement action plan, including the restoration of livelihoods and an action plan for gender equality.
Uganda and South Sudan signed a memorandum in 2015 on the creation of a 400 kV transmission line between Olwiyo and Juba in order to address electricity deficits in South Sudan. The aim was to provide a clean, reliable and affordable electricity supply to South Sudan while increasing electricity export revenues for Uganda. The memorandum mandated the Nile Equatorial Lakes Subsidiary Action Programme (NELSAP) to coordinate project implementation.
“The project is essential for unlocking business opportunities, catalysing local industry and the production of goods. It will create jobs for young people and women, helping to reduce poverty by strengthening resilience and addressing the main drivers of conflict and fragility in South Sudan, in line with the strategies pursued by the Bank,” said Bhebhe Themba, Country Manager for South Sudan at AfDB.
