Eskom Uganda Limited Hands Over Nalubaale and Kiira Power Stations To Government

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The government of Uganda through Uganda Electricity Generation Company Limited (UEGCL) has taken back Nalubaale (180MW) and Kiira (200MW) hydropower complex from Eskom Uganda Limited.

The government’s takeover follows the expiration of the signed Concession and Assignment Agreement (CAA) of 26th November 2002.

In the CAA signed, UEGCL represented the government as the asset owner of the Nalubaale (180MW) and Kiira (200MW) hydropower complex and assigned its rights and interests in the asset to Eskom (U) Ltd (EUL) for a period of 20 years starting from the 1st April 2003.

Speaking during the re-transfer ceremony at the former Owen Falls Dam in Jinja, the Minister of State for Mineral Development Peter Teko Lokeris said the current concession period will naturally expire/terminate on 31st March 2023 pursuant to the provisions of the Concession and Assignment Agreement.

“It however required that before the end of the concession term, Eskom re-transfers the Complex to Uganda Electricity Generation Company Limited. The purpose of our visit here today is to officiate and witness the retransfer of the Complex back to the Government,” he said.

Minister Lokeris added that in addition to the Concession and Assignment Agreement (CAA), the Government signed a Support Agreement dated 26th November 2002 relating to the Nalubaale and Kiira hydropower complex which provided for inter alia buy-out provisions at the termination of the CAA for a tenure of 20 years as provided for under Clause 2.1(a) of the Agreement which became effective on 1st April 2023.

The Minister said; “Therefore, in order to facilitate the retransfer process and as per the Support Agreement, the Ministry of Energy and Mineral Development (MEMD) is undertaking an audit through the Office of the Auditor General (OAG) to help inform the Government on any potential Buy-Out Amount if any at the end of the concession period.”

According to Minister Lokeris, the Audit of the final Buy-Out Amount is in its final stage and a stakeholders meeting was held on 16th March 2023 to review the Nalubaale-Kiira Eskom Concession Audit report. He pledged that government is ready to fulfil the outstanding obligations that will arise out of this audit.

“We take note of the enormous investments that have been executed by Eskom on the Complex, some of which their Defects Liability Period will spill over into the Operations and Maintenance regime of UEGCL. Please ensure that arrangements are put in place to manage such aspects. We also strongly believe that Eskom has built adequate local capacity that will be able to continue the proper operations and maintenance of the Complex under UEGCL as a mechanism to ensure smooth continuity of service,” he said.

The minister assured workers that have been under Eskom Uganda Limited that their operations and contract will continue still under UEGCL. “I have been reliably informed that UEGCL has completed its recruitment process for the key staff who will take over the operations of the plant post the transfer date and I am happy to report that over 96 per cent of the Eskom staff have been taken over by UEGCL at same and/or better employment terms than their current terms.”

He noted that the staff shall remain a critically valuable resource to the proper operation of the Nalubaale and Kiira complex post-re-transfer to UEGCL. “ I, therefore, request Eskom to continue providing all the necessary cooperation and assistance to UEGCL during this transition period.”

In preparation for the handover of the Complex, and to ensure minimal disruption to the grid and critical activities ongoing at the power plants, the Permanent Secretary Ministry of Energy and Mineral Development Pauline Irene Batebe noted that with support from other stakeholders including the Ministry of Finance, Planning and Economic Development, Office of the Auditor General, Electricity Regulatory Authority, Uganda Electricity Transmission Company Limited, Uganda Electricity Generation Company Limited and Eskom (U) Limited,  Ministry of Energy has undertaken a number of activities to ensure a smooth transfer of the complex.

Among the activities include; the procurement process for the required Operations and Maintenance services was undertaken. These include security, cleaning, catering, weed removal etc.

A stakeholder meeting was undertaken on 16th March 2023 to review the Nalubaale – Kiira Concession Audit Report. And they are awaiting the final report to fulfil any obligations that shall be required of the Government.

“I would like to express our gratitude to Eskom (U) Ltd for ensuring that the 380MW complex is kept functional over the 20-year concession period and maintaining a consistent supply of electricity to the grid throughout that period. Ladies and Gentlemen, the importance of the 380MW Nalubaale – Kiira Complex to our country’s Electricity Supply Industry cannot be overstated. For a long time, the power complex provided and continues to be a source of reliable electricity necessary for our country’s industries and factories. I would like to pledge that my Ministry will ensure that the facility is well maintained and will continue to provide clean, affordable and reliable electricity necessary for our country’s leap to the Middle-Income status,” she said.

Meanwhile, Kira/Nalubaale power plants contribute 380MW to the country’s generation capacity currently at 1378.1 MW and it is expected that this will raise to 2,000 MW once Karuma is commissioned in the near future.

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