A Simulation-Based Analysis of Electricity Access in Uganda

Significance Of The Problem

Access to power is tied to any country’s development. It provides opportunities for increased social welfare, education, health and income generating opportunities all of which Uganda needs. Uganda’s small but significant economic development of ~6% 5-year compound growth (The Heritage Foundation, 2014) is being stifled by power inaccessibility. Critical power shortages have been constraining GDP growth by an estimated 1% to 2% per year undermining Uganda's efforts toward accelerating industrial development, creating employment and alleviating poverty (Alstom, 2013, p. 16; SITHE GLOBAL, 2014). Uganda’s population split is 20% urban and 80% rural (Electricity Regulatory Authority, 2011). The lack of access to electricity is most felt by Uganda’s substantial rural population with access at only 7%(IEA, 2013). While Uganda’s aggregate development figures look very promising; development in rural areas has lagged well behind that of urban areas. Poverty remains pervasive and extensive and much of Uganda's rural population remains isolated with limited access to basic modern goods and services among which is electricity. The result is a vicious cycle whereby the potential for rapid and broad‐based economic growth is severely constrained by the lack of access to electricity while on the other hand the consequent poverty levels inhibit infrastructure investment potential. If Uganda is to continue growing economically, increasing its overall net productivity, the level of electricity access must be ramped up to keep pace and even better begin to drive the development and key to this is obtaining a good understanding of the factors limiting the needed growth in power access.