Background to Establishment of UECCC
- In 1999, Government adopted a new strategic approach to reform the power sector, with the publication of the Power Sector Restructuring and Privatization Strategy (PSRPS).
- The background to the reforms was the urgent need to attract investment into the power sector, both in generation and distribution, to underpin economic growth in Uganda.
- One of the key features of the strategy was the introduction of private sector participation both in existing operations as well as the financing and management of future investments.
- However, Private sector participation in the power sector was hampered by a number of barriers to investment, including but not limited to the following:
- Lack of appropriate financing (long term debt and concessional financing) in the local market to meet the financing requirements of renewable energy projects and programmes;
- Lack of technical capacity on part of local financial institutions to finance energy projects;
- Lack of early-stage financing and technical assistance to unlock energy projects
To address the foregoing barriers, the Uganda Energy Credit Capitalisation Company (UECCC) was setup to provide an institutional framework to facilitate participation of the private sector by addressing the above financing challenges.
Specifically, the UECCC was set up to serve as a Credit Support Institution, working with various partners including but not limited to Financial Institutions and Development Partners to provide innovative financing options for renewable energy and/or rural electrification projects on business principles.