The Ugandan government is likely to increase electricity tariffs, after it procures additional thermal generators to alleviate the biting power crisis which has threatened the economy growth, a state-owned newspaper reported on Wednesday.

According to the New Vision daily, Minister of State for Energy Michael Werikhe revealed the plan while submitting a report for meeting the country's electricity supply needs tabled to the Natural Resources Committee of parliament.

He was quoted as saying that thermal generation has a high cost due to escalating petroleum prices.

He noted that since the consumer subsidy which the government has injected into the program for the last year is not sustainable, there is need to review the tariff policy to reflect the economic cost of power supply.

About 108 million U.S. dollars would fund the thermal generation to counter the incessant load shedding that has gripped the country, Werikhe said, adding that "energy is the next priority area to the government after security and defense."

"After the procurement of thermal generation and the regulatory authority reviewing the tariff policy, the power tariffs will either go up or down," he said.

"The Electricity Regulatory Authority periodically reviews the power tariffs and without an alternative, there will be total shut- down of the economy," he added.

The plan said the power plants would be located at Mutundwe, Namanve in the central region and Nalubaale sub-station in eastern Uganda.

"The plants will be acquired on lease basis. As an interim measure, the government will secure financial support from the World Bank and other bilateral partners to buy down the high cost of thermal generation to avoid subjecting consumers to a high tariff shock," it added.

Werikhe said 36 small and mini-hydro companies had been identified and investment programs to develop small renewable energy projects had been laid out.

Uganda is currently facing a major power crisis with parts of the country having up to 12 hours with no power, which has gravely affected the country's economy.

Source: Xinhua