Uganda needs stronger financing models and better-prepared energy projects to turn its ambitious power generation targets into widespread and affordable access to electricity, Absa Bank Uganda has said.
The call was made during the 2nd Energy Convention held on Friday, July 24, at Four Points by Sheraton, where policymakers, financial sector leaders and energy experts discussed how Uganda can move beyond increasing power generation to ensuring more households and businesses have reliable access to electricity.
Speaking during a ministerial plenary session attended by State Minister for Energy Sidronius Okaasai Opolot, Absa Bank Uganda Chief Financial Officer Michael Segwaya said the country’s Tenfold Growth Strategy was ambitious but achievable if the public and private sectors worked together to mobilise long-term financing.
Segwaya pointed to the Shs2.07 trillion allocated to the Power and Renewables sector in the 2026/27 national budget as evidence of the government’s commitment to expanding the sector. He said financial institutions must work with government and other stakeholders to develop bankable projects capable of attracting the investment needed to transform Uganda’s energy plans into actual infrastructure.
“Uganda’s Tenfold Growth Strategy is an ambitious but achievable target,” Segwaya said. “As financial institutions, our role is to co-create long-term, bankable financial structures that turn ambitious masterplans into operational assets.”
Segwaya highlighted Absa’s involvement in financing projects across Uganda’s energy value chain, including the Bujagali Hydropower Project.
He also cited a $50 million five-year facility provided to the Uganda Electricity Distribution Company Limited (UEDCL) in December 2025 to support connections for more than 200,000 households.
He further pointed to a Shs11.085 billion concessional credit facility extended to the Uganda Energy Credit Capitalisation Company (UECCC) under the Electricity Access Scale-Up Project (EASP).
Uganda’s installed electricity generation capacity has reached 2,098 megawatts, but access remains a major challenge. Overall electrification stands at about 60%, while access in rural areas is estimated at 42.4%. More than 90% of rural households still rely on biomass fuels, according to figures presented at the convention.
The country aims to increase installed generation capacity to 15,420 megawatts by 2030 and 52,482 megawatts by 2040.
However, experts at the convention said achieving these targets will require more than simply building new power plants. They identified access, affordability and the ability to structure projects in ways that can attract financing as some of the biggest challenges facing the sector.
Benard Kamatte, Absa Bank Uganda’s Head of Financial Institutions Group, said private investors were willing to finance energy projects, but many initiatives still lacked the level of preparation needed to attract commercial funding.
Speaking during a panel discussion on blended finance, green bonds and the capacity of local banks to assess energy projects, Kamatte said the main challenge was often the bankability of projects.
“Capital follows risk mitigation. If we don’t have a good understanding of the technology we’re supporting, it becomes very difficult to pull capital into that space,” he said.
He added that inadequate project preparation, including weak feasibility studies, environmental assessments and limited technical advisory, continues to delay investment in the sector.
Kamatte said Uganda’s commercial banks had already demonstrated their ability to finance major infrastructure projects, pointing to their participation in large-scale developments such as the $5.6 billion East African Crude Oil Pipeline (EACOP) project.
He argued that similar financing models could help unlock investment in renewable energy, mini-grids and battery storage, but called on Development Finance Institutions (DFIs) to provide early-stage support to reduce risks during the pre-construction phase and address gaps in technical information.
Kamatte cited Absa’s blended finance partnership with UECCC as an example of how concessional funding from government and development partners can help lower the cost of financing.
Under the arrangement, on-lending interest rates are capped at 15% per annum to support last-mile electricity connections, institutional solar projects and clean cooking technologies.
The convention also explored the potential of carbon credits and green bonds to attract more investment into Uganda’s energy sector.
Participants said closing project preparation gaps, expanding blended finance and strengthening local financial institutions’ ability to assess emerging energy technologies will be critical to mobilising the capital needed to expand electricity access and support Uganda’s long-term economic ambitions.
