OP-ED: Uganda’s $500 Billion Economy Will Be Built on Wires, Not Just Watts

By Joel Aita

I have spent more than twenty years building infrastructure in this country, and there is one conversation I have had more times than I can count.

An investor sometimes a manufacturer, sometimes a developer sits across the table, excited about Uganda. The land is secured. The financing is arranged. The business case works. Then comes the question that changes the mood in the room: “When can we get connected, and at what reliability?”

Too often, I have not been able to give the answer they needed to hear. In 2001, an Egyptian Electrical component industry wanted to open a factory in Arua. Challenge, there was no power enough to set up the facility in Arua.

That is why, whenever I hear our national ambition discussed growing the economy tenfold, from roughly US$50 billion to US$500 billion I notice what the conversation always circles around, and what it always misses. We debate dams. We debate gigawatts. We ask how much power we must generate.

Those are important questions. But I believe we are asking the wrong one first.

The bigger challenge is not generating electricity. It is moving it.

Consider where we actually stand. Over two decades, Uganda has invested billions in Bujagali, Isimba and Karuma and several other small stations. Our generation capacity has more than doubled with over 700MW “excess power”. And yet we have watched power plants commissioned before the transmission network was ready to evacuate them. We have watched industrial parks wait years for substations while their tenants ran diesel generators. Today we hold a generation surplus and still lose roughly one in every six units of electricity before it earns a shilling.
Generation attracts headlines. Transmission quietly determines whether those headlines translate into factories, jobs and exports.

Now run the numbers forward. A US$500 billion economy will require somewhere between 15 and 20 GW of installed capacity, but capacity is only half the equation. Supporting it will demand approximately 13,000 kilometres of new high-voltage transmission lines over the next two decades: an investment well above US$5 billion in transmission infrastructure alone, before we count the substations and grid intelligence that come with it.

Should government finance all of this? It cannot, and it should not. The same national budget must build hospitals, schools, roads and water systems. But here is what two decades in this industry have taught me: transmission is not a burden to be carried. It is an asset class waiting to be offered.

Uganda should introduce Public-Private Partnerships for electricity transmission.

The concept is straightforward. Private investors finance, build, operate and maintain transmission lines under long-term concession agreements. 25 to 35 years while government retains ownership of the strategic network and full regulatory oversight. Think of it as a toll highway for electrons: government decides where the highway goes; private capital builds it; users pay regulated charges for access.

The detail that makes this bankable is the revenue model. Investors are compensated through regulated availability payments paid when the line performs to agreed standards, not according to how much electricity flows through it. By separating infrastructure performance from electricity demand, the investment becomes predictable enough for pension funds and long-term institutional capital, the cheapest and most patient money in the world.

This is not theory. Brazil has awarded hundreds of transmission concessions through competitive auctions and attracted tens of billions of dollars into its grid. India’s competitive transmission programme has done the same. In both markets, the pattern was identical: early investors earned attractive pioneer returns, confidence grew, and larger pools of international capital followed at ever-lower cost.

I believe Uganda is approaching that same moment and I say this as someone who has delivered projects under this country’s regulatory and financing environment, not as an outside observer. We already hold the ingredients investors look for: an experienced regulator in ERA with two decades of credible tariff-setting, the Bujagali precedent proving that landmark private power financings can succeed here, and access to multilateral institutions able to mitigate political and payment risk. NSSF could be the first investor to move into such a project earning a decent 14-18% return.

What remains is the framework: a long-term national transmission master plan tied to our industrial corridors, a transparent tariff methodology written into concession agreements, efficient wayleave acquisition, and a pipeline of projects tendered competitively rather than negotiated one by one.

And one principle above all: build the grid before demand arrives. Industrial parks should have capacity before the investors land. Mining regions should have substations before extraction begins. Data centres each drawing as much power as a small city will choose the country where reliable high-voltage supply already exists, not the country that promises it later.

The investor across the table does not want to hear about our plans to connect them someday. They want to see the line already humming at the boundary of their site.

A US$500 billion economy will not be built by power stations alone. It will be built by the network that connects those stations to every factory, technology park, mine, city and enterprise that depends on reliable electricity.

In the end, Uganda’s growth will depend not only on the watts we produce but on the wires we have the vision, and the courage, to finance and build.

Joel Aita
An Infrastructure Consultant
Muni University Council Chairman

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