Petition regarding the World banks support US$5.5m grant agreement signed on 22nd June 2012)and the poor implementation of Uganda’s Rural Electrification programme.

Monday, September 30th, 2013

Mr. Moustapha Ndiaye

World Bank, Country Manager,

Uganda Office

29th June 2012

Dear Sir,

Re: Petition regarding the World Bank’s support (US$5.5m grant agreement signed on 22nd June 2012) and the poor implementation of Uganda’s Rural Electrification programme.

1. My name is Dickens Kamugisha and I am the current Chief Executive Officer of a local NGO called Africa Institute for Energy Governance (AFIEGO) with offices in Kampala and Hoima town. AFIEGO is a registered public policy research and policy advocacy organization whose main objective is to promote good governance in Uganda’s energy sector for national development to benefit the citizens especially the poor of the poorest and vulnerable communities that have remained at the margins of society for decades despite the reforms and the heavy investments that are being sunk into the country’s energy sector. AFIEGO is a member of Uganda’s leading coalitions on energy including Publish What You Pay Uganda, OilWatch Network Uganda, Civil Society Coalition on Oil, Publish What You Pay Uganda-Bunyoro Chapter and others with a combined membership of over 146 NGOs/CBOs across the country. These networks help us to operate in many parts of Uganda and this humble petition is based on my 7 years of research and advocacy experience with rural communities of Uganda.

2. For the last 7 years, among other things, I have keenly followed and engaged in a number of developments in the energy sub-sectors of electricity, renewable energy, oil, gas, minerals and others. In most of the reforms above, the World Bank has continued to lead other development partners in supporting our country to extend clean energy country wide for the benefit of the citizens including the poor and the down-trodden. On behalf of AFIEGO, the civil society and community partners and on my own behalf, I take this honor to say, thank you.

3. Before mentioning some of the reforms that your bank has supported and our government implemented over time, let me clearly state that the objective of this petition is not to question the intentions of the above grant or the principle of rural electrification programme but to request you to work with our government and civil society to ensure that such grants/support is used effectively to help re-programme the agenda of the RE programme, a good programme whose poor implementation has consistently failed it to deliver the promised benefits to the citizens. We are now in the 12 year of RE, but no clear and participatory research has been undertaken to evaluate its benefits and relevancy against the original objectives and the size of investments including the tradeoffs to other sectors such as clean water, health and education that would have received extra funding

Yes, the rural poor need electricity to day than tomorrow but what trade off should they make. If to access electricity by the poor means reinstating taxes on clean water, increasing tariffs from UGX380/ to UGX520/ or reducing the budget for the health services in the country, then, there is every reason to call for re-evaluation of that good initiative (Rural Electrification) that has become a monster/liability to other sectors. This is my concern. How do we ensure equitable benefits from RE?

4. This petition is also intended to bring to your attention, the failure by the government and development partners like you to involve civil society and local communities in the design and implementation of rural electrification initiatives. This is denying the initiative/projects the much needed popular support for success. People as beneficiaries remain ignorant and suspicious about the objectives of RE. The RE process is secretive and does not allow the civil society to access right information to sensitize and educate the public to support and benefit from the initiative. Those who try to educate the public, they are always blamed for sabotaging government programmes as may be seen in one of the attached press releases by Uganda Electricity Transmission C-ompany Limited (UETCL) against AFIEGO or by the Ugandan courts that take decades to conclude cases filed in defense of the common good.

5. Several electricity reforms have taken place in Uganda:

§ The Electricity Act 1999,
§ The establishment of Electricity Regulatory Authority under the Electricity Act,
§ The National Energy Policy 2002, the policy goal is to meet the energy needs of Ugandans for social and economic development.
§ The Renewable Energy Policy 2005,
§ The Rural Electrification Strategy and Plan 2001-2010. The Statutory Instrument No. 75 of 2001 and Electricity (Establishment and Management of the Rural Electrification Fund) instrument of 2001 which established three inter-related mechanisms for the management of Uganda’s rural electrification programme. These mechanisms are: the Rural Electrification Fund (REF), the Rural Electrification Board (REB) and the Rural Electrification Agency (REA).
§ Other reforms included the establishment and introduction of institutions such as Uganda Electricity Generation Company Limited (UEGCL), Uganda Electricity Transmission Company limited (UETCL), Uganda Electricity Distribution Company Limited (UEDCL), UMEME, ESKOM and other private actors.

6. All these are great reforms and the World Bank (WB) has played a very huge role both financial and technical support for the success of the above reforms. As Ugandans, we are grateful to our government and your support. But how has the government translated those reforms to benefit the citizens? Have we carried out value for money audit to see whether they make any economic and social relevancy? What is our criteria for measuring success and failure to inform any necessary adjustments required? To day, despite heavy investments in the above reforms, our tariffs and power losses still remain one of the highest in Africa. If in 1990, the population of Uganda was less than 17 million and today, we are over 34 million people, what does the rural electrification access increase from 2% to 5% in 10 years mean in actual terms? How many people have connected to power and can use it profitably to day than those without power or those with power but cannot benefit from it because of poverty or because its expensive or lack sensitization? We cannot accept our political leaders to make our Uganda become a perpetual debtor in form of loans to finance initiatives that are never in touch with reality. We must de-programme and re-programme our priorities.

Address the governance challenges regarding the rural electrification

11. While institutions such as Electricity Regulatory Authority (ERA) is established and regulated by the Electricity Act 1999, the Rural Electrification Agency (REA) that is in charge of rural electrification is not clearly grounded on any binding law in Uganda. The Rural Electrification Strategy and Plan 2001-2012 that guides the rural electrification is merely a plan and not a law that can be enforced. The powers and actions of REA are dictated by line ministers/politicians. In effect, REA lacks the independence to do her work effectively. I request you to encourage the government to empower the REA with legislation. This will help Ugandans to demand for accountability from REA and enforce their rights.

12. Further, despite the concerns above, we still appreciate and thank the government and her partners like you for some of the benefits of the rural electrification and other power reforms that have been implemented over time including extending power lines along the roads of many remote districts in Uganda. Indeed, without such reforms, most of these remote districts and villages would not have ever dreamt of seeing electricity poles along their dusty roads or seen wires over their houses. Other benefits include a legal framework that provide space for rural electrification and private players.

13. However, from the governance perspective, the concern of many Ugandans is that the government even with your support has continued to implement such laws and projects through investor perspective as opposed to public perspective approach. More so, despite the good laws on paper, the government has continued to implement the good initiatives through closed processes with no input from the said beneficiaries/the poor to whom such reforms were intended to benefit.

14. As a result of these and other problems, the rural electrification projects have continued to miss out on the much needed popular support of the public, a key ingredient of success for any project aimed at providing the common good. In the end, the government and development partners have to continue providing unsustainable support such as subsidies to the private sector.

15. The private sector on the other hand must constantly seek to insulate itself from what is a high-risk environment of investing its capital to providing electricity to the poor (the people who clearly understand the goals of the initiative or cannot pay for power or capital expenditure are higher than returns) through guarantees from the government. In Uganda, these guarantees have succeeded in encouraging private companies to remain inefficient because they feel secure as government must meet the costs in case of failure of the project as it happened with the Kiira dam on River Nile. Remember, Kiira dam was constructed to produce 200MW of electricity, to day, it produces 50mw but the investor is entitled to returns on the 200mw. Yes, we need subsidies but Uganda’s electricity crisis is largely to such ghost reforms such as Kiira dam rather than lack of many dams or lack of World Bank subsidies. With the ongoing global financial problems, our government must spend wisely and spend where it brings higher social and economic returns. The current indiscipline and abuse of our budgets by the executive cannot allow the poor to benefit irrespective of how much the World Bank invests in Uganda. Help the civil society to mobilize the public to say no to corruption and abuse by the executive in the sector.

Address the governance challenges regarding the rural electrification

16. Remember, electricity is currently not treated by the government as a human right and as such, the citizens have no direct right to demand for accountability, access and affordability. Civil society, and other actors for their part, has been hampered by highly restricted access to decision-making imposed on it by the government and lack of technical and financial support from institutions such as the WB to help them empower the citizens/beneficiaries about the goals and objectives of the rural electrification. Lack of public participation and awareness is a big problem to any project intended for the common good especially if the focus is to benefit the poor.

17. I believe, a well functioning governance mechanism such as effective implementation of laws, strong institutions, public participation, access to information and access to justice would allow for better decision-making about the goals of rural electrification initiatives and ensure that such goals are tailored to the needs of the rural poor and the down-trodden who are at the centre of such projects. They would also allow for flexibility and feedback mechanisms to the implementers and therefore provide concrete evidence for adjustments where necessary.

18. Currently, even where the RE is working, its the rural rich who have sons and daughters in cities and urban centers who are capturing all the benefits of the above initiatives like it has been happening in towns. Government must appreciate that not all rural people are poor and I am not suggesting that the rural rich should not access power. But if by coincidence, the 5% access to electricity in rural areas is captured by the rich whose wealth did not come from electricity, this may mis-lead the implementers. In the end, any support such as subsidies provided in form of grants will never reach the intended beneficiaries. It’s these oversights that are partly to blame for the failure of RE and other projects in Uganda to be effective.

Lets look at some of the reports by REA regarding their achievements

19. If we consider the recent reports by REA, its clear that a number of remote districts such as Sembabule, Kaberamaido, Kanungu, Oyam, Ntungamo, Kabale, Rukungiri, Kibaale and others have been electrified under Rural Electrification in the last five-ten years. But these are some of my questions to government, WB and others who provide the financial resources and leadership for rural electrification projects. What does increase in rural electrification access and affordability mean in as far as the poor are concerned? Does it mean the number of villages/districts connected to the grid or the number of households connected and able to use and pay for power? We need answers to these and other questions.

AFIEGO’s study in Ntungamo and some of the findings

20. In 2006, the grid was extended along the roads in the remote villages of Kahunga, Nyamirama, Kafunjo, Nyakasa, Rusa, Kiyoora and others in Nyakyera Sub-county, Ruhaama Constituency-Ntungamo District, a stretch of 40km with over 700 households.

21. In 2010, AFIEGO carried out an investigative study to find out the extent to which the people in the above villages were benefiting from the said power. Remember, Nyakyera sub-county is in Ruhaama constituency of Hon. Jennet Kataha Museveni, the First Lady of Uganda and by the design of Uganda’s politics, such a constituency is considered by many as a privileged area where people should not be very poor.

Below is what we found out.

§ After 5 years of getting electricity under rural electrification, out of 700 households in the area, only 27 had managed to connect their houses to the power lines.
§ Out of the 27 above, only 3 households were paying UGX15,000/ as their power consumption per month each.
§ The remaining 24 consumers, on average, each was paying UGX6,000/ per month.
§ Twenty four (24) of the households above did not have a flat iron or a fridge. On average, each homestead had 4 bulbs even where the houses were more than one.
§ 80% of the households switched of all the lights between 9pm and 11pm every night.
§ Another finding was that 90% of the above households were owned by people who had relatives living in towns especially Kampala. Its those relatives who had paid for the connection fees and had paid for the building of relatively good houses.
§ No household was using her electricity for commercial services such as ironing, water boiling, hair cutting or reading at night. Some few had a TV and a radio.
§ One family of Mr. Nyansio Mukiga in Nyamirama village that wanted to connect to electricity was asked by UMEME to pay UGX6m/ for 3 poles which it failed to pay and up to now does not have electricity.
§ Only 3 schools (1 Primary Teachers College and 2 Primary Schools) out of 11 schools in the area were connected to electricity.
§ When we inquired about any changes in income or health during the time before electricity and after connecting to electricity, all the households reported that there was no difference in income. They said that they were not using power to generate income. Some families told us that their children were at home because when the schools they were in connected to power, the school fees increased to cater for the costs and in the end, the families failed to raise the hiked school fees.
§ 22. We conducted other 3 researches in the districts of Sembabule, Kanungu and Kibaale to see whether the situation in Ntungamo’s Kiyoora was an isolated case or not but the findings were 97% similar for all the districts.
§ 23. Further, the research in the four districts showed that REA spent over US$200,000 to extend the grid to cover each parish in any district. However, the monthly collections for each area averaged UGX400,000/.
§
§ Need for independent research

24. Through this petition, i request you to undertake independent studies to verify and appreciate what is going on under the rural electrification programme. Otherwise, our government can allocate UGX1.3 trillion to the energy sector and reduce the health budget to UGX600b or reinstate 18% VAT on clean water in the budget of 2012/2013 and you the partners can support such a budget but that cannot guarantee that the citizens will enjoy such budgets and live a better life. It should be noted that huge resources without discipline and good planning is what has continued to fail Uganda’s good intentions. Otherwise, why reduce the health budget, reinstate taxes on clean water or increase electricity tariffs from UGX380/ to UGX520/ and then on the other side deceive rural poor people that you are giving them electricity to improve their lives. That is a sign that Uganda’s priorities have no space for the poor. Water and health services are more critical to the poor than expensive electricity at least for the next 20 years from now. I request you to ensure that your support is put where it can yield better returns for the citizens.

25. Specifically, through this petition, I request you to do the following

Conduct a value for money audit for all rural electrification projects so far implemented against other sectors such as health and water whose budgets are being re-allocated to the electricity sector.
Advise the government to put a law in place to govern the work and practice of the Rural Electrification Agency (REA). This law should be effectively implemented to guarantee the independence of REA and reduce the interference of the minister of energy/the politicians who more often than not direct REA to electrify villages for purposes of attracting voters to the ruling party.
Involve the civil society in RE programme and ensure that NGOs are empowered and facilitated to sensitize the communities to effectively use electricity profitably and demand for accountability.
Work with the government to ensure that the Electricity Disputes Tribunal (EDT) provided for under section 93 of our Electricity Act 1999 begins to function and establish branches at district levels to provide justice to the aggrieved poor who cannot come to Kampala because of costs.
World Bank’s grants and loans should be used to electrify households and not roads in the villages. Success should be based on the number of households and not the number of villages/districts with grid.
REA should go beyond infrastructure development and ensure that private companies such as UMEME, BECS in Bundibugyo, PACMECS, FERDSULT and others charged with connecting consumers deliver on the objectives of rural electrification.
Undertake a study to determine the relationship between poverty, lack of access and affordable electricity and the ability of the poor to use electricity to over come poverty. There is suspicion that even if you put electricity in the villages of the poor including connecting their houses to power, such poor people have no capacity to translate that electricity into social and economic opportunities. So, how do poverty and lack of electricity affect each other? If poverty is the major reason for lack of access and affordable electricity by the poor, then, a transition time must be created to give the poor free electricity until that time when they overcome poverty and gain capacity to pay for that electricity. On the other hand, if lack of electricity access is the cause of poverty, there, we must empower the poor to connect and educate them on how to use it to over come poverty. In all cases, the primary objective should be on enabling households to access and afford electricity rather than minding about the number of villages connected to the grid as it has been happening.
Last but not least, use the United Nation’s General Secretary and European Commission’s Sustainable Energy for All initiative (SE4ALL) forum to lead a global campaign to declare electricity a human right. The campaign should be based on the promise that electricity is key to the enjoyment of other fundamental human rights such as life, health, education and the dignity of mankind.

26. Never before have I written such so long a letter. It would have been much shorter if our government has been listening to the citizens’ cries and our advice. I pray that you find the content useful and please, advise me where you can. Where I have said anything that overstates or understates the facts, I take responsibility. This petition is written in the hope that it will be seen as part of our humble contribution in making Uganda a better place to live in especially for the poor and the down-trodden that cannot stand on their own without support I thank you and hope to hear from you soon.

Yours for the cause of justice, equity and effective development.

………………………………..

Dickens Kamugisha

Chief Executive Officer

Petition regarding the World banks support US$5.5m grant agreement signed on 22nd June 2012)and the poor implementation of Uganda’s Rural Electrification programme.

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