100 Enterprises To Get Generators From EADB

By Eddyson Lugangwa Posted 15 May 2006 @ 12:52 am EET     Print     Reprint     E-Mail     Comments

Nairobi (IBTimes.com) - In a bid to alleviate the biting electricity crisis faced by industrialists in Uganda, the East African Development Bank is to fund the acquisition of thermal generators for more than 100 companies through a Power Leasing Scheme.

The scheme, launched on May 11, will make it affordable for enterprises to acquire generators and save them from the current idle capacities and the potential of shutting down altogether due to load shedding.

Already, a number of enterprises have indicated intentions to reduce their workforce in view of the level of idle capacity arising out of the power crisis while others face imminent closure. The Bank has committed $5 million (Shs9,143.3 billion) for the scheme.

"With this $5 million Power Leasing Scheme, we do hope that over 100 enterprises will get generators of 100 KV that will help them ease the power constraints they have been facing since early February 2006," Director General East African Development Bank Godfrey Tusiime said in a news conference.

Tusiime said that once these funds are fully utilised; the benefiting enterprises will have cumulatively generated about 13 MW of power to enable them run their industries normally.

The repayment schedules will be structured according to the enterprises' individual cash flows. In order to widen the scope of the enterprise that qualifies for the scheme, the bank will only require minimal security.

"Charges on the equipment will attract interest rate in 13-15 percent [in shillings] and 10-11 percent [in US Dollars]," he said. To kick-start the scheme without any further delays bank is inviting the enterprise to send their applications for appraisal.

Enterprise executives are free to identify and make their own choice for the type of the generators they want and give the list to the bank including price quotations. After every thing has been made by enterprises themselves the bank will do the importation of the equipments based on the enterprises' choices.

Tusiime however cautioned enterprises against inflating equipment prices, warning that such practices will lead to loan repayment being high or risking being disqualified.

He also promised that the effective demand of the product will cause the bank to increase the money from $5m to $10 million for scheme.