Africa-Press – Uganda. The Government of Uganda has completed a Shs 884 million rural electrification project in Kanungu District, bringing power to Mpungu Tea Factory in Kinyambeho, Mpungu Sub-county, whose operations had stalled since its commissioning two years ago.
The project involved the installation of two 500kVA, 33/0.433kV transformers at the factory, extension of 1.31 km of Medium Voltage (MV) power lines, 1.71 km of Low Voltage (LV) power lines, and the installation of one 50kVA, 33/0.433kV transformer at Omukimanyu Village. Residents along the power line route provided free land access, reducing overall project costs.
Speaking at the commissioning, the Minister of Energy and Mineral Development, Ruth Nankabirwa, emphasized the significance of reliable electricity for industrial growth.
“We learned that this factory had been operating on a generator for some time, but high running costs forced it to shut down. Without electricity, investments stall, jobs are delayed, and economic returns remain unrealised,” she said.
Nankabirwa added that the government remains committed to ensuring that factories operate without interruption, farmers can add value to their produce, households access affordable energy, and Uganda continues its trajectory toward middle-income status.
By powering Mpungu Tea Factory, the government is catalyzing a value chain that will transform Kanungu District’s economy. Early signs of this impact are already visible, with fast-growing trading centers emerging around the factory.
The factory is a subsidiary of Kayonza Growers Tea Factory Limited, a smallholder-owned enterprise with over 8,000 shareholders. Commissioned on July 8, 2023, the factory was expected to employ about 220 people and boost household incomes. However, delayed electricity connectivity hindered operations, resulting in high reliance on costly generators and accumulation of interest on long-term loans.
The total cost of the tea factory project is USD 5.7 million (approximately Shs 20.8 billion), financed through a USD 4.5 million long-term loan from Dutch funding entity Oiko Credit, and USD 1.2 million from Kayonza Growers Tea Factory Limited. The delay in electricity connectivity has contributed to accumulated interest payments, affecting the financial well-being of farmers and staff.
Kanungu District LC5 Chairman, Sam Kajojo, described the electrification as “a big milestone that will lower production costs and increase profits.”
He, however, noted that farmers need urgent support, citing unpaid salary arrears for 12 months, leading some to lose property to financial institutions and, tragically, others to take their own lives.
Mpungu Sub-county LC3 Chairperson, Robert Kakuru, added that while three villages—Ahakikome, Bweyongyezo, and Akaharere—signed consent forms for the power lines, they remain without electricity.
The Managing Director of Uganda Electricity Distribution Company Limited (UEDCL), Paul Mwesigwa, indicated that these communities would be served when financing becomes available.
The idea of establishing the new tea factory was conceived in 2017 after Kayonza Growers Tea Factory Limited received over 15 million kilograms of green leaf from its farmers and estates—far exceeding the processing capacity of its existing facility.
The new factory, equipped with two tea processing lines, was established to accommodate the increased production and further expand tea farming in Kanungu District.
The electrification of Mpungu Tea Factory marks a significant step toward industrialization, job creation, and economic growth in Kanungu District, reflecting the government’s commitment to supporting rural enterprises and boosting value addition in Uganda’s agricultural sector.
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