Government commits Shs2.07 trillion in the 2026/27 financial to energy expansion as power demand grows

Uganda has earmarked Shs 2.07 trillion for energy development in the 2026/27 financial year as government accelerates investments aimed at supporting industrialisation and long-term economic growth.

Finance Minister Henry Musasizi said reliable and affordable electricity remains one of the most important foundations for Uganda’s transformation agenda.

“Reliable and affordable energy is essential for industrialisation and socio-economic transformation,” Musasizi said while presenting the national budget.

The minister reported that Uganda’s installed electricity generation capacity has reached 2,098 megawatts following continued investments in hydropower, solar energy and transmission infrastructure.

Government’s long-term ambition is to increase generation capacity to more than 52,000 megawatts to support industrialisation, urbanisation and economic expansion.

During the outgoing financial year, government completed and continued construction of several major transmission lines across the country.

These include the Kole-Gulu-Nebbi-Arua line, Kampala Metropolitan transmission network, Mirama-Kabale line, Karuma-Tororo line, Tororo-Lessos line and the Mutundwe-Entebbe transmission project.

Significant progress was also registered on substations serving industrial parks in Mbale, Kapeeka and the Kabalega Petrochemical Industrial Park.

The minister noted that electricity access continues to improve, particularly in rural areas.

“The share of households in rural areas connected to grid electricity has nearly doubled in the three years from 6.8 percent in FY 2021/22 to 11.4 percent in FY 2024/25,” Musasizi said.

Government has also expanded access to off-grid energy solutions.

Under the Electricity Access Scale-up Project, more than 419,000 solar connections have been installed countrywide.

Meanwhile, construction has commenced on four mini-hydropower stations that will provide electricity to remote communities.

Looking ahead, government plans to commence construction of the 380-megawatt Kiba hydropower project, a floating solar plant at Isimba and utility-scale solar projects in the Elgon and Acholi regions.

One of the most notable announcements in the budget is continued preparation for nuclear energy generation.

Musasizi confirmed that government will undertake preparatory work for Uganda’s nuclear power programme at Buyende.

The minister said the investments are intended to ensure sufficient power supply for industries, businesses and households while positioning Uganda as a competitive manufacturing destination.

Priority areas for the coming financial year include expansion of electricity generation, rural electrification, industrial power connections and strengthening transmission infrastructure nationwide.