By Ibrahim E. Kasita
In a significant boost to Uganda’s industrial sector, the Electricity Regulatory Authority (ERA) has maintained the average electricity tariff for extra-large industrial consumers for the third quarter (July 2025 to September 2025) at US cents (US¢) 5.5 per kilowatt-hour (kWh).
Additionally, extra-large industrial consumers will continue to buy power at US¢5 per kWh during off-peak hours (between midnight and 6:00 am).
“I want to congratulate the Electricity Regulatory Authority for this achievement. ERA has been consistent in bringing down electricity prices over the years,” confirmed Dr. Ezra Muhumuza Rubanda, the Executive Director of the Uganda Manufacturers Association (UMA).
“Manufacturers are leveraging price competitiveness on power to enhance production. This in part explains why there is significant increase in the exports for manufactured goods which is impacting positively Uganda’s terms of trade.”
This milestone marks a significant step by the government to stimulate economic growth by providing affordable electricity to power Uganda’s manufacturing sector.
The initiative underscores Uganda’s commitment to industrialization, national competitiveness, and job creation through providing affordable and reliable electricity.
It is a strategic intervention that aligns closely with the goals of Vision 2040 and the Fourth National Development Plan (NDP IV), both of which place industrial growth at the heart of Uganda’s development agenda.
A Presidential Priority
The push for a US¢ 5 per unit has long been a central theme in President Yoweri Museveni’s public addresses on industrial policy. Earlier this year, the Minister of Energy and Mineral Development affirmed that delivering this tariff was among her top two assignments from the President—a clear indication of the political will behind the initiative.
Stimulating Industrial Growth
Lower electricity tariffs provide tangible economic benefits. For manufacturers, decreased production costs will boost profitability and enable reinvestment into business expansion, recruitment of employees, increase contribution to Tax revenue, and enhanced technologies.
The expected benefits include; (i) increased competitiveness of Uganda’s manufacturing sector, especially in regional and global markets hence improvingUganda’s trade balance and (ii) broader investor interest, both local and foreign, in Uganda’s industrial sector.
Crucially, lower tariffs also pave the way for greater technology adoption. With more affordable energy, businesses can upgrade to more efficient, modern machinery—enhancing productivity while reducing environmental impact.
A Cleaner, Greener Path Forward
The reduced tariff could also accelerate Uganda’s transition to a more sustainable industrial sector. With cheaper and reliable electricity—primarily generated from renewable energy sources—industries may reduce dependence on expensive and air-polluting diesel generators.
This shift could significantly cut industrial carbon emissions and reinforce Uganda’s commitments under national and international climate agreements.
Implementation Challenges and Safeguards
Despite the promise, implementation is not without challenges. Infrastructure limitations—particularly in transmission and distribution—must be addressed to ensure all eligible industries can benefit.
Ensuring the long-term sustainability of the US¢ 5.5/kWh tariff will require maintenance of; strong regulatory oversight; transparent monitoring systems, andaccountability mechanisms.
Close collaboration between ERA, the Ministry of Energy, utility providers, and private sector stakeholders will also be essential to navigate technical and financial hurdlesahead.
Conclusion
The Electricity Regulatory Authority’s announcement of the US¢ 5.5/kWh tariff is more than just a numbers game—it is a powerful signal of intent. It reflects a government ready to back industrialists with concrete, cost-saving measures that can drive economic transformation.
By providing affordable electricity to Uganda’s biggest manufacturers, this policy has the potential to unlock significant industrial growth, generate thousands of jobs, and chart a path toward a greener and more resilient economy.
As Uganda moves steadily toward its US¢5/kWh target, the promise of a thriving, industrialised, and inclusive economy draws nearer, with power at its very core.
The Author works at the Electricity Regulatory Authority (ERA)
