direct negotiation of new power projects, with ERA only coming in at a later stage to provide licenses, as occurred for example with the recent Karuma and Isimba licenses. The government has also developed incentives, such as concessional loans, sovereign guarantees, and feed-in tariffs, in order to attract private sector participation and investment in new generation.

**Table 10. Formal regulatory substance in Uganda and comparators, 2015**<sup>19</sup>

|**Indicators**|**Kenya**|**Senegal **|**Tanzania **|**Uganda**|**International**<br>**benchmark**|
|---|---|---|---|---|---|
|**Regulatory Substance**|81%|73%|83%|78%|76%|
|**_Tariff Regulation_**|88%|76%|88%|92%|77%|
|_Regulatory Framework for Tariffs_|_100%_|_86%_|_100%_|_100%_|90%|
|_Determination of Tariffs_|_75%_|_67%_|_75%_|_83%_|64%|
|**_Quality Regulation_**|54%|42%|63%|58%|75%|
|_Quality of Service Standards_|_75%_|_50%_|_75%_|_50%_|82%|
|_Quality of Service Enforcement_|_33%_|_33%_|_50%_|_67%_|68%|
|**_Market Entry Regulation_**|100%|100%|100%|83%|77%|
|_Permitting New Entrants_|_100%_|_100%_|_100%_|_100%_|90%|
|_PPA Approvals_|_100%_|_NAP_|_100%_|_67%_|57%|

Note: Scores based on index developed for the Rethinking Power Sector Reform Project. For more details go to project website at http://www.esmap.org/rethinking_power_sector_reform Turning to the issue of quality regulation, ERA’s performance is more in line with other Sub-Saharan African countries in the global benchmark group – all of which are below the average (table 10). Though the 2003 Grid Code and the Quality of Service Code for Uganda prescribe a number of methods that can be used to derive and describe compliance to quality of service and supply standards and the Electricity Act sets legal provisions for the regulator to enforce these standards through penalties, the impact and implementation of these codes has been somewhat limited by the lack of adequate infrastructure for remote control and monitoring systems. What’s more, there are no fines for failing to meet published quality of service performance targets and related technical data is not disclosed to the public. In fact, quality of supply remains a major concern and despite ERA setting quality of supply standards there is inadequate monitoring and enforcement.

# _3.4.3 Summary_

The steady development of regulatory capacity, autonomy and accountability has proved to be one of the most successful aspects of reforms in Uganda. ERA has benefited from strong legislation and (in its early years) the support of the MoFPED in steadily building capacity and a robust regulatory culture, that has increasingly been able to engage constructively with stakeholders. Uganda is one of the only countries in the region where the sector is considered broadly financially viable and tariffs are close to cost-reflective although power remains expensive. Uganda outperforms other countries in the region and the global benchmark group when it comes to tariff regulation. The historic record shows that the regulator has been able to implement the successive substantial tariff increases needed to get close to cost recovery for the sector. In fact, ERA is one of the few regulators among the rethinking economies where there is not much difference between the written legal and regulatory framework and the actual perception of how these are implemented (table 11). However, in the case of quality

> 19 For detailed regulatory indices, see the annex.

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