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 by ERA can apply for premium payments through participation in a competitive Request for Proposal and subsequent evaluation process (see here).
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 deteermined by the Electricity Regulatory Authority (ERA) of Uganda.
Premium Payments will be structured as payments per kWh to 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) which they are expected to sign with the Uganda Energy Transmission Company Limited.
The Premium Payments to be provided under this first Request for Proposal are summarized in Table 1-Column 3 below.
The premium levels as well as the capacity factors will be reviewed regularly by the Steering Committee, with guidance from the Investment Committee.
To avoid that individual projects benefit disproportionally from the GFPPM, 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 has been established. 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 will be disbursed upon Commercial Operation Date (COD), thus after successful completion of plant and demonstration of ability to produce, as certified by the Uganda Energy Transmission Company Limited (UETCL, single buyer) in accordance with the Power Purchasing Agreement. 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 will thus follow a results-based logic.
For more information on GET FiT, click here