Monday, September 30th, 2013

Government should Incentivize small scale renewable energy projects-2013.

 Usually large scale projects like hydro power tend to grab headlines when it comes to renewable energy. However, there are many less celebrated small scale renewable energy projects. These have the potential to fuel businesses, reduce the carbon footprint, enhance environmental conservation, create employment and create income. In April, the New Vision newspaper ran a story about Rose Twine, a woman making millions through her energy saving stoves. The stoves optimally utilise special stones (other than charcoal) which in turn conserves the environment.

The stoves, apart from being environmental friendly, solve the problem of wood shortage which is rampant in rural areas. They reduce deforestation and wood consumption by 95% and cooking time by 75%. They protect the eco-system and reduce emission of harmful gases. The stoves can also be used to charge phones and light bulbs.

The renewable energy sector has a growing market that remains untapped despite continuous rise of unemployment rates among the youth. Supporting these projects will help meet multiple objectives as stipulated in Uganda’s renewable energy policy 2007. The objectives include: Increasing access to clean energy, improving security of energy supply, contributing to inclusive social and economic development, protecting the environment and creation of employment in the emerging green economy- In essence, setting Uganda on a low carbon pathway.

The last few years have seen a growth in community based small scale renewable energy projects. These have mainly been triggered by increased awareness of climate change and environmental issues. Also, the social and economic benefits of such projects to individuals and the wider community are invaluable. However, the key problem remains in financing such projects.

These projects are often perceived as too risky for investors and too costly for the economy. This and other challenges such as in-house technical expertise, project coordination, and up-front funding at the planning stage, have hindered growth of these small scale renewable energy projects.

Small scale renewable projects respond to the urgent need to cut Carbon emissions, to boost the economy, diversify the energy supply, increase resilience and security of supply. It is important to note that renewable energy is an investment opportunity which can pay for itself over time. For businesses and citizens, much of this opportunity lies with small projects where the public can see the direct benefits of investment.

Employment created by small scale renewable projects has significant beneficial impact on local businesses and community as a whole because much of the labor required to implement these projects such as (contractors, installers, electrical engineers etc.) becomes part of the core workforce of the community.

We therefore urge government to create a range of incentives to encourage roll out of these projects like provide finance at beneficial rather than off-market interest rates, flexible grants or ‘soft’ loans, project preparation support to those that demonstrate potential and profitability and help those with promising project concepts develop their ideas into bankable proposals.

Diana Taremwa

dtaremwa@afiego.org