Uganda seeks off-grid power for schools

From the newsletter

The Ministry of Education and Sports in Uganda has launched its first Request for Proposals (RFP) for the provision of electricity through an Energy-as-a-Service model. This initiative will seek to provide reliable power to 45 seed secondary schools across the country and improve learning conditions for thousands of students.

• The Energy-as-a-Service (EaaS) model allows institutions like schools to access reliable electricity without the burden of upfront costs and technical expertise. In this model, a third-party company finances, installs, and manages the energy infrastructure, handling all maintenance and operational aspects. The customer pays for the energy service, not the equipment itself, making it a cost-effective and sustainable solution.  

• The Ministry of Education has allocated $5.5 million in grant funding to cover all electrical work costs and up to 70% of other upfront costs. The remaining upfront costs and ongoing operation and maintenance (O&M) will be financed through fixed quarterly payments over a 10-year service agreement. 

More details

• Uganda's electricity access rate is low, just over 50%, with the majority of connections concentrated in urban areas. If the same access rate is applied to schools, this suggests that roughly half or 15,000 of the schools in Uganda, including pre-elementary, elementary, and secondary levels, lack electricity access. Some schools are located in remote areas where extending the national grid is expensive, making decentralised solutions like solar power a viable option to meet their energy demands.

• Schools don't generate income, and for them to establish their own generation plants can be an expensive project that would deprioritise many other essential school projects. An energy-as-a-service model through decentralised energy solutions makes it easier for them to get energy access.

• The decentralised energy systems in the advertised RFP will provide power to the main school buildings, a separate system for staff houses, and six solar streetlights for each school. To meet the schools' daily energy needs, the project has set a target of 73,498 Wh for the main buildings and 17,100 Wh for staff houses, incorporating a 20% load growth factor.

• The success of the project will be a key determinant for future electrification of schools. If it works successfully, then it can be replicated in other schools. This concept of energy as a service has successfully worked for commercial and industrial customers in Kenya.

Our take

• The low electricity access rate in Uganda points to the available opportunity for energy companies to venture into the market. Electricity is becoming a very important component of productivity. In schools, students can extend their study hours and even get to do practicals that need powered machines. Schools will therefore increasingly seek to get connected.

• Schools offer less risk and guaranteed consumption and it is easy to monitor their demand, something energy companies value. On top of this, there is potential for increased consumption as electric vehicle ownership rates are expected to increase in the future. School buses and individual staff cars can offer much-needed consumption to enable energy companies to recoup their investment.

• Schools often stimulate economic activity in their surrounding areas. Small businesses like shops and kiosks pop up to cater to the needs of students and staff. This presents an opportunity for energy companies to expand their customer base by targeting these businesses with tailored energy solutions.