The GET FiT Premium Payment Mechanism (GFPPM) is one of the instruments of the GET FiT Program. The setup of the GFPPM is simple, yet innovative and effective.
Small-scale renewable energy generation projects in an advanced planning status and with a valid development permit issued by ERA have applied for premium payments through participation in competitive Requests for Proposal and the subsequent evaluation process.
The Premium Payments constitute a result-based incentive grant designed to enhance the financial viability of the selected projects and are payable to the project developers in addition to the relevant REFiT tariffs determined by the Electricity Regulatory Authority (ERA) of Uganda.
Premium Payments are structured as payments per kWh to the chosen private developers, calculated on the basis of expected generation of eligible projects over the lifetime of the 20-year standardized Power Purchase Agreement (PPA) signed with the Uganda Electricity Transmission Company Limited (UETCL).
The Premium Payments provided under the GFPPM are summarized in Table 1-Column 3 below.
The premium levels as well as the capacity factors are reviewed regularly by the Steering Committee, with guidance from the Investment Committee.
To avoid that individual projects benefit disproportionally from the GFPPM, there is a cap on the plant capacity factor for individual projects (60% for small hydro, 40% for biomass and bagasse); this automatically limits the total premium payments an individual project can receive. Actual premium levels per kWh will not vary across individual small-scale renewable energy generation projects in the same technology group.
A two-staged disbursement is applied for the FiT Premium Payment Mechanism. 50% of the FiT premium is disbursed upon Commercial Operation Date (COD), thus after successful completion of plant and demonstration of ability to produce, as certified by the single buyer, UETCL, in accordance with the PPA. The remainder of FiT premiums (50%) will be disbursed alongside the PPA against energy delivered, but limited to a 5- year period. Support to projects under GET FiT Uganda will thus follow a results-based logic.
For more information on GET FiT, click here