MUBENDE – XSABO Solar Power Plant, a Uganda Development Bank – UDB funded project in Kabulasoke, Mubende will produce 20MW upon completion.
The plant, according to Dr. David Alobo – Founder and Managing Director – Xsabo Group is the most modern solar power plant in Sub-Saharan Africa and the largest in East and Central Africa.
Speaking at the UDB annual press conference 2024 at the solarline facility on Wednesday, Dr. Alobo revealed that the plant comprises of 38,000 bifacial monocrystalline PV modules, 547 horizontal single-axis solar trackers which adjust the position of the modules to follow the sun as it moves from East to West, 84 string inverters rated 250kW each, 3 power stations with communication units, distribution cabinet, transformer, LV section, bus bar system, MV switching gear cabinets and other additional auxiliaries such as smoke detectors and emergency lights, among other modern equipment.
Standing at 80% completion, the UGX 82.6 billion Sub-Station investment project, has modules connected in series to form a string of 35 modules and the whole plant has a total of 1094 strings with each string generating about 1,400 Voltages in Direct Current form.
“I wholeheartedly thank the Uganda Development Bank for providing the loan facility that has enabled the successful construction of this solar power plant. It will be ready for commissioning before 31 March 2024,” he said.
“With our projects, we at the Xsabo Group are contributing constructively to securing a better future for current and future generations by powering development as a way to pave a path for the people of Africa out of poverty while using commercial diplomacy to spur genuine prosperity. This makes The Xsabo Group part of a Growth Agenda to build resilience, catalyse sustainable growth and promote net-zero economic transition in Uganda and across Africa as the world economy moves towards a low carbon future,” he added.
Officiating at the event, the Minister of Energy and Mineral Development, Dr. Ruth Nankabirwa noted that the plant, licensed for a period of 21 years will upon completion generate 20 MW and be sold to the Government through the Uganda Electricity Transmission Company Limited (UETCL) at US Cents 7.1 Kilowatt Hour, “which is the lowest tariff among the existing solar plants.”
Represented by Dr. Sarah Wasagali Kanaabi – Chairperson, Electricity Regulatory Authority – ERA, Nankabirwa said the power will be interconnected along the 132 kV Kabulasoke-Nkonge Transmission Line and will largely serve Electricity Consumers connected to the Nkonge and Kabulasoke Substations.
“The plant will push the Country’s grid-connected Solar portfolio to 80.6 MW joining other five plants already connected with a combined capacity of 60.6 MW.”
“Nkonge Solar Plant will be the second Solar plant proudly owned by a Ugandan, fully constructed and operated by Ugandans. This is a key milestone in Uganda’s Energy profile and it speaks directly to the Local Content and BUBU Policies of the Government of Uganda,” she added.
Minister urged UDB to take special interest in supporting indigenous developers and investors in the Electricity Supply Industry, by providing low-cost financing for infrastructure development.
“This will significantly contribute to lowering electricity tariffs in Uganda, given that the cost of financing is one of the key drivers of the cost of electricity.”
Sharing the Bank’s performance for the year ending December 2023, Mr. Denis Ochieng, Acting MD-Uganda Development Bank said that their cardinal role is to support the revitalization, transformation, and resilience of the country’s economy through supporting the private sector.
He said that through their product and services portfolio, they have been able to promote and develop key growth and priority sectors of the economy including Agriculture, (both primary & agro-processing), Manufacturing, Tourism, and targeted interventions to support Infrastructure and Human Capital Development (education and health).
During 2023, Ochieng says the gross loan portfolio grew by 24% to UGX1.6 trillion compared to UGX1.29 trillion posted in 2022.
“The Bank’s funds inched up year-on-year by 12 percent, from UGX1.23 trillion to UGX1.38 trillion attributed to capital Injections by the government during the period and retained and reinvested profits from the prior years, with these sources complemented by additional funding from funding partners. We continue to explore all options to improve our funding base to reach more enterprises thereby expanding the impact our impact.”
He added, “There was a slight uptick of 5 percent in borrowing and grants, reaching UGX245 billion from UGX232 billion in December 2022. At least UGX466.5 billion was collected in loan repayments and reinvested to fund disbursements to various enterprises during the year.”
INVIGORATING PRIVATE INVESTMENT
In the same period, Ochieng notes that the Bank approved funding amounting to UGX691 billion to support 201 projects spread across the country.
“Consistent with UDB’s strategy to support the key sectors of the economy, the bulk of this approved funding, i.e. 59%, targeted the industry sector (agro-industrialization and manufacturing) with UGX409 billion approved to this sector alone. A sum of UGX19 billion was allocated to fund primary agriculture activities while UGX223 billion was approved to boost the infrastructure sector.”
In the same year, he revealed that a total of UGX610 billion was disbursed to various projects across the country, with the highest amounts of funds disbursed to the primary agriculture, agro-processing and manufacturing sectors.
SUPPORTING VIABLE STARTUPS
Since 2022 when the Bank added private equity to its product offerings, Mr. MD says they have been supporting viable Ugandan-founded start-ups with patient capital.
“Under this portfolio, as of year-end 2023, UDB had invested a total of UGX 9.9 billion with an additional UGX25.3 billion approved. The portfolio and approvals consist of innovative startups with high impact in sub-sectors like vaccine manufacture, electric-mobility, paint manufacture, leather value addition, and eco-friendly building materials.”
He says they also extended business training to more than 500 enterprises across the country of which 291 are to be incubated for funding this year. 61% of the enterprises trained were in the agriculture sector.
“We have also supported 40 projects across the agricultural sector (mainly farmer groups) SMEs, Youth, and Women. The supported projects represent about 5,000 beneficiaries that have benefited from business advisory support which has enabled them to catalyze and further grow their businesses.”
TACKLING SOME OF UGANDA’S CROSS-CUTTING ISSUES
Mr. Ochieng told the press that they have drawn specific interest in certain segments of the economy intended at propelling and facilitating equitable growth and working towards achieving a market-driven economy including;
- The Ugandan Contractors Financing Initiative aimed at providing targeted financial and business advisory support to emerging and existing Ugandan contractors to aid performance and contractor growth. The call has, so far, attracted 126 contractors with a funding commitment of UGX150 billion from the Bank.
- The Hybrid electricity customer connection credit framework: This is implemented in partnership with the Electricity Regulatory Authority (ERA) and the Ministry of Energy and Mineral Development. The framework aims at enabling electricity access to 550,000 households and small businesses. UDB committed UGX 148.5 billion towards the initiative, and as of the end of December 2023, over 29,000 households and businesses had been connected to electricity under the initiative.
- Integrating technology into agriculture. In 2023, the Bank successfully launched an innovative digital lending solution branded as Agri-connect. This initiative is aimed at providing the last mile Ugandan, mainly in primary agriculture, with seamless access to short-term credit to cater to their seasonal financial needs required to enhance their production activities.
- Through a partnership with Ensibuuko, a Ugandan FinTech, the Bank has been able to digitize more than 112 farmer groups, a representation of more than 700 farmer-beneficiaries, who have been able to access digital microloans ranging from UGX500,000 to UGX3,500,000. The Bank has managed to disburse UGX500 million to farmers in this segment using this digital financial solution.
- Climate Finance Facility. This is a Special Purpose Vehicle with a unique and specific focus on financing, unlocking, and catalyzing private sector investment in local green sectors that drive green impact and financial inclusion. The Bank committed UGX50 billion towards the capitalization of this facility. The beneficiaries are also exposed to the Bank’s Green Advisory as well as the Project Preparation Support to make them bankable but more importantly grow them to become viable green businesses.
EXPANDING SERVICE DELIVERY
The Bank, he said, last year opened the first regional office in Gulu City to act as a liaison point for all the districts that constitute Northern Uganda. The Office commenced operations on 28 August 2023.
He revealed that they will be establishing five regional offices strategically located in various districts of the country which include Mbale for Eastern Uganda, Hoima for the mid-west region, Arua for West Nile, Mbarara for Western Uganda as well as the Gulu office which is already operational.
CREATING SUSTAINABLE SOCIO-ECONOMIC DEVELOPMENT FOR UGANDA
Mr. Ochieng says 18,558 jobs are expected to be created through the approved projects on top of generating UGX 11.39 trillion in additional output value, UGX 615.96 billion in tax revenue to the Government and UGX 3.3 trillion foreign revenue earnings.
“From the total output value, tax revenue of UGX 615.96 billion will be generated for the government. The contribution to the economy is also reflected in foreign exchange earnings that will be generated to the tune of UGX3,339.53 trillion.”
CATERING FOR THE UNDERSERVED SEGMENTS INCLUDING THE YOUTH, WOMEN AND SME’S.
In 2021, he says UDB launched an intervention for the SMEs, Youth, and Women and that they continue to grow enterprise assets and revenue, create employment, and redistribute wealth across all the sub-regions of Uganda.
“As such, in 2023, the Bank approved UGX20 billion for 91 enterprises. Additionally, the Bank disbursed UGX13 billion to 73 enterprises during the year. Up to 234 other enterprises with loan applications amounting to UGX47 billion are under consideration.”
The Bank commits 20% of its core capital to the financing of eligible enterprises within these segments.
