Stakeholder perceptions in the factors constraining the development and implementation of public private partnerships in the Ugandan electricity sector

Abstract

Amidst increasingly constrained public budgets and inadequate service delivery, private sector participation through public private partnerships is increasingly being used as a means for delivering physical infrastructure. The government of Uganda, which is currently grappling with a crippling electricity power deficit, has over the years, pursued a number of strategies to encourage private sector participation in the electricity sector, but with limited success. This paper presents the findings of research into the relative importance as perceived by sector stakeholders, of factors that hamstring private sector participation in the development of hydropower generation facilities through public private partnerships in Uganda. The stakeholders considered in this paper are those representing the government and private sector entities in the development of the partnerships. A review of literature and project documents enabled the identification of relevant factors. Data was collected from the respondents by means of a self administered structured questionnaire and quantitative methods used for data analysis. Key findings from the research indicate that the respondents regarded the regulatory and legal frameworks as being attractive for private sector participation and this business environment is further enhanced by their confidence in the government’s commitment to honour its contractual obligations. In contrast, difficulties in structuring and obtaining finance together with issues over the cumbersome approval process and resistance from environmental groups were identified as the most significant constraints to the development and implementation of public private partnerships in the Ugandan electricity sector. Recognizing the importance of an adequate and reliable supply of power in Uganda, as in so many other sub-Saharan countries, it is anticipated that the identification of the relative importance of the constraints as perceived by stakeholders, will inform the process of developing measures and strategies to mitigate the constraints thus facilitating the speedy implementation and deal closure of public private partnership initiatives with the ensuing benefits.