Uganda Power Rationing Hits Manufacturers, Coffee Processors
July 18 2011 - 4:39AM
Dow Jones News
The ongoing power rationing in Uganda is hitting manufacturers
and the processing of coffee that is at the peak of the 2010-11
(October-September) coffee season, industry officials said
Monday.
This is likely to slow the marketing season of the current crop,
according to David Muwonge, the head of production and marketing at
Uganda's national coffee farmers' body, Nucafe. Coffee processors
have been affected most because they normally operate at night and
that is when most rationing occurs.
"There is too much coffee coming from farmers, but the
processors are not operating at the same pace due to power
shortage," he said.
In the past couple of weeks, Uganda's power distribution
company, known as Umeme, has been rationing power across the
country due to a shortage caused by inadequate generation from
fuel-fired thermal plants over unpaid fees by the government.
Last week, the government assured the owners of thermal power
plants it would pay at least 300 billion Uganda shillings ($118
million) in arrears, which seemed to ease the situation as two
plants resumed generation.
However, Uganda continues to face a shortage of around 50
megawatts of power, following the closure of the diesel-fired Kiira
thermal plant operated by London-listed Aggreko PLC (AGK.LN).
The government has yet to renew Aggreko's generation contract,
preferring to boost generation from its main hydro power station on
the River Nile, by releasing extra water until November, according
to Irene Muloni, Uganda's energy and minerals minister.
In a bid to address the public outrage triggered by the power
shortage, Uganda's energy regulator last week directed Umeme to
restrict rationing mainly to night time, when most households are
expected not be using power. However, this is hurting
manufacturers, who deal in raw commodities such as coffee, cocoa,
tea, fish and horticultural products.
Uganda contracted independent power generators in 2006 in a bid
to ease power shortages caused by lower water levels at the
country's main hydropower stations following a long drought.
Later this year, some of Uganda's thermal power plants are
expected to start using heavy oils produced during the extended
well-testing exercise in the oil-rich Lake Albertine rift
basin.
Uganda is Africa's largest robusta coffee grower.
-By Nicholas Bariyo, contributing to Dow Jones Newswires;
256-75-2624615 bariyonic@yahoo.co.uk
Aggreko (LSE:AGK)
Historical Stock Chart
From Mar 2024 to Apr 2024
Aggreko (LSE:AGK)
Historical Stock Chart
From Apr 2023 to Apr 2024