Bureaucracy, weak opportunities drive power producers to East Africa
Bureaucracy and lack of opportunities have pushed some local power producers to set up projects in East Africa. Power producers say that Tanzania, Kenya, Uganda, Rwanda and Burundi which comprise East Africa present ample opportunities in this sector.
“Development work in Sri Lanka is getting increasingly difficult due to bureaucracy and inconsistency,” an official from a major power producing firm told the Business Times. Another producer noted that Sri Lanka at present does not possess many lucrative opportunities. “The smaller projects that are available aren’t exciting,” he said.
Interference from local politicians is also a problem. “These issues made us look at other areas – particularly East Africa,” he said, noting that this has also increased their diversification potential.
Eco Power, V.S. Hydro, Lanka Transformers Ltd (LTL) and Hemas Power are some firms that have gone to East Africa.
Power industry analysts say that in most East African countries there’s a severe shortage of electrification. “There are many agencies (donor, etc.) to assist power generation. The governments there give firms a lot of encouragement,” an analyst said.
V.S. Power completed an 18 mega watt (MW) hydro project in Uganda with US$ 25 million in 2011, an official told the Business Times. He added that they are pursuing a 5 MW hydro project in Uganda which will cost them $ 13 million. “We are interested in Tazania to construct hydro projects,” he said.
He said that most sites in Sri Lanka are saturated as many are already developed.
Eco Power has also completed a 6.5 MW hydro project in Uganda and they are exploring another project in Uganda which, the official said will be about 5 MW. They have also completed a project in Rwanda, he added.
Hemas Power PLC officials said that they are looking at an offshore project in East Africa and this is under negotiation. “We are getting close to finalising it. Getting into new shores and new segments is a part of our strategy and we are bullish on this project,” an official said.
D. Jayawardene, CEO LTL told the Business Times that they export locally-made transformers to Uganda and Tanzania. “Last week we signed a contract with Ethiopia to supply 1,500 transformers. This is to cover their entire capacity,” he said.
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