Access to energy is a necessity in the fight against poverty and a prerequisite for economic development. For the global climate challenge to be resolved and for climate goals to be reached, the growth in energy demand has to be met with a strong strategy for development of renewable energy and more effective usage of energy. Acknowledging that international development assistance will not be enough to overcome the major challenges of ensuring global access to electricity services, but will need significant efforts and contribution from the private sector, Norway is using public sources to mobilize and incentivize commercial investments that lead to increased energy access. Norway has identified better incentives in the form of guaranties for the payment for the production as well as a cost-reflective price for the produces electricity as the main obstacles for more private investments in renewable energy in Uganda. As GET FiT provides the relevant provisions in line with this policy, Norway has decided to support the GET FiT Programme and signed the cooperation agreement with KfW as an implementing agency in December 2012.
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The reasons for the UK Government’s support to GET FiT are to meet anticipated energy demand and avoid either an energy shortfall or the use of emergency thermal generation, in Uganda. UK financing for the GET FiT project is from The Department of International Development (DFID) Uganda and The Department of Energy and Climate Change (DECC) through the International Climate Fund(ICF).
The UK Government has set up the ICF to help developing countries tackle climate change and reduce poverty. The GET FiT programme fits with the ICF strategic objectives by promoting cleaner, greener growth and will create new partnerships with the private sector.
The programmes focus on both removing existing constraints to growth and providing savings to the Ugandan budget in line with the DFID’s Uganda Operational Plan.
The EU-Africa Infrastructure Trust Fund (ITF) is a blending instrument which provides grant resources from the European Commission and certain EU Member States for combining with long-term loan financing from selected Development Finance Institutions (DFIs). By blending its grant resources with loan financing from the DFIs, the ITF helps to mobilise additional project finance to promote investment on infrastructure in Africa, and foster sustainable economic growth and poverty reduction.
In 2013, the European Commission entrusted the ITF with a new envelope dedicated to supporting projects which respond to the Sustainable Energy for All (SE4All) initiative targets - providing universal access to modern energy services, to double the global rate of improvement in energy efficiency, and to double the share of renewable energy in the global energy mix.
The GET FiT program is one of the first projects which will receive ITF support from this dedicated SE4All envelope. The ITF is supporting GET FiT with a EUR 20m investment grant that will facilitate additional Solar PV power generation which will help reduce CO2 emissions by 11 million tonnes over 20 years and translate into the connection of additional 6,500 household customers or almost 40,000 beneficiaries to the grid.
For further information see ITF website http://www.eu-africa-infrastructure-tf.net/