TotalEnergies has signed an agreement with Bujagali Energy Ltd as part of its plans to invest in energy projects, particularly renewable energy.
The deal will see the oil company acquire a 28.3 per cent stake in the hydropower plant located in Jinja, 80km east of Kampala.
With a capacity of 250 MW, the plant covers a significant part of Uganda’s electricity demands.
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Total will also acquire minority stakes in two projects under development in Rwanda (260 MW) and Malawi (360 MW).
“This acquisition of renewable hydroelectric assets and projects in Africa reflects our desire to contribute to the continent’s energy transition by bringing electricity to the people of African countries,” the company said in a statement released on Tuesday.
According to Patrick Pouyanné, the chairman and CEO of TotalEnergies, this transaction is an example of the oil major’s ability to implement its multi-energy strategy in oil-producing countries to support them in their energy transition.
“We believe that TotalEnergies will be a strong asset owner going forward, with the ability to further develop the projects and contribute to the energy transition in Africa,” he said.
TotalEnergies has interests in a number of hydropower projects worldwide with a gross capacity of 3.7GW. These include 218MW installed in Europe – France (19MW), Portugal (33MW) and Turkey (166MW) – 1.5GW under development in Mozambique (Mphanda Nkuwa project) and 2GW under development by Adani Green in India.
Total is also developing renewable energy projects in Uganda and Tanzania to meet the growing demand for electricity, reportedly over five per cent per year, and plans to install between 500 MW and 1 GW of gross capacity in the two countries.
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The company has already invested in solar in Uganda, with a power plant in Soroti, and plans for more in Tororo and Iganga by the end of next year.
In Tanzania, the company is working on a 115MW solar power plant and a 100MW wind power plant in projects worth $500m over the next five years, according to highlights from the company’s “Sustainability & Climate Workshop” held in March this year.
Uganda hopes that this development will keep electricity tariffs low, an issue that private sector players through the Uganda Manufacturers Association and the Private Sector Foundation Uganda have been pushing for. The cost of doing business in Uganda remains one of the highest in the East African region, in part due to the cost of electricity for manufacturers, which is currently over 10 US cents per kWh – well above President Yoweri Museveni’s recommendation of 5 US cents per unit.
“We are delighted to become a player in the hydropower sector in Uganda, a country where we are also developing a major oil project,” TotalEnergies said.
In Uganda, TotalEnergies is involved in oil and gas development projects in the Lake Albert basin alongside China National Offshore Oil Corporation and Uganda National Oil Company.
Minister for Energy and Mineral Development, Ruth Nankabirwa Ssentamu, said: “This is good news because TotalEnergies is involved in fossil fuel activities and this acquisition of stakes in the Bujagali hydropower plant will go a long way.”
