The government has executed a Shs884 million rural electrification project in Kanungu District, which has powered Mpungu Tea Factory in Kinyambeho, Mpungu sub-county, whose production had stalled since its commissioning two years ago.
The project includes the installation of two 500kVA, 33/0.433kV transformers at Mpungu Tea Factory, extension of 1.31kms of Medium Voltage (MV) power line, extension of 1.71 km of Low Voltage (LV) power line, and installation of one 50kVA, 33/0.433kV transformer at Omukimanyu Village.
The cost excludes way leaves as the residents provided free land access for the power lines.
Ms Ruth Nankabirwa, the Minister of Energy and Mineral Development, at the commissioning, said the project was prompted after learning that the factory operated on a generator for some time, and had to shut down due to high running costs.
‘As a ministry, we understood that without electricity, your investment would stall, jobs would be delayed, and economic returns would remain unrealised,’ Ms Nankabirwa said on Tuesday.
She added that the ministry continues to ensure that factories operate without interruption, farmers add value to their produce, households can access affordable energy, and Uganda moves steadily toward middle-income status.
By powering Mpungu Tea Factory, Ms Nankabirwa says the government has catalysed a value chain that will transform the economy of the district, which has already started being witnessed with the fast-growing nature of surrounding trading centres.
The factory, a subsidiary of Kayonza Growers Tea Factory Limited, a small holder owned tea factory in Kanungu District with over 8,000 shareholders, was commissioned on July 8, 2023, and was expected to directly employ about 220 people and boost household incomes, but delayed electricity connectivity made that impossible.
Other challenges include; load shedding, which has made the cost of running a generator almost six times that of electricity, a very poor terrain, which requires strong logistical support and equipment to obtain timely and better services from the Uganda Electricity Distribution Company Limited (UEDCL) in case of a technical fault on the line.
The total cost of the project is $5.7m (about Shs20.8 billion), when fully complete, with funding through a long-term loan of $4.5m from Oiko Credit, a Dutch funding entity, and $1.2m from Kayonza Growers’ Tea Factory Limited. The delay in operationalisation of the factory has, however, resulted in the accumulation of interest payments.
Mr Sam Kajojo, the Kanungu District LC5 chairman, described the latest development as ‘a big milestone that can leverage on the cost of production and accrue profits’.
Mr Kajojo, however, says the farmers need support, with all of them demanding salary arrears for 1 2 months, adding that because of that, some of them have lost property to loan sharks and financial institutions, while others have committed suicide.
Mr Robert Kakuru, the Mpungu Sub-county LC3 chairperson, says the factory had lay idle for the past two years due to power, while metals had reportedly started rusting.
Mr Kakuru, however, noted that three villages, including Ahakikome, Bweyongyezo, and Akaharere, signed consent forms to allow the power lines to pass through their communities, but they remain without electricity. Mr Paul Mwesigwa, the UEDCL managing director, however, says if financing allows, those communities will be served.
BACKGROUND
The idea of setting up a tea factory was conceived in 2017 when Kayonza Growers Tea Factory Limited, with two tea processing lines, received an overwhelming production of green leaf from its farmers and estates in excess of 15 million kilograms.
With this kind of production, Kayonza stood to lose a lot in terms of quality and costs and therefore decided that a new processing facility be established to take care of increased production and the expansion of tea in the district.