@Eskom
Uganda limited
The Chief Executive Officer,
Electricity Regulatory Authority,
P O Box 10332,
KAMPALA
UGANDA
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El.ECTRICITY REGULATORY
\llTHORITY
1 7 NOV 2015
17 November, 2015
Moses K Kahumuza
256 332240403
*
Dear Sir
APPLICATION FOR 2016 TARIFF REVIEW.
In accordance with our Generation liGense and your letter dated 5th November 2015, we take
the pleasure to submit our application for the 2016 tariff as UShs 42,392.46 per MWh based on
the following information:
a. The investment assets added in 2015 amount to USD1,628,583 only and these were all
financed from Eskom's internally generated funds.
b. All investment assets are depreciated over a twenty year period as approved by ERA
and also in line with the Concession and Assignment Agreement; thus a weighted
depreciation rate of 5% per annum is derived. Please see appendix A for the
investment assets register for more details.
c. The 2016 concession fees were assumed to increase by 20%, and a 10% increase was
assumed for the regulatory fees at USD990,000 from USD900,000; while the royalties
are to remain the same at UGX292 per MWh.
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However; the actual amounts may vary in line with ERA's approval of the submissions
for the year 2016 by the respective beneficiaries.
d. The operating and maintenance costs (0 & M) split is 64.60% local and 35.40% foreign
(see appendix B attached) based on the following:The cutoff date for the O&M UGX/USD split is 31st October 2015.
All expenses have been included except Concession Fees, Regulatory Fees,
Royalties, promotional costs and finance costs which are not covered by GOMC.
The rest of the costs have been split in accordance with the currency in which
they were incurred.
The depreciation charge has been modified by excluding investment assets'
related depreciation in deriving its currency split.
All other foreign currencies (such as Rand, Euro, etc) have been considered as
foreign under USO category.
e. In line with Clause 14.6: Changes in Law; of the Power Purchase Agreement, there
has been an inclusion of UGX 62,394,220 in respect of VAT on imported services for
Eskom Uganda Limited
Kampala Office: Studio House, 2nd Floor, 5 Sandall Rise Bugolobl, Kampala
Tel +256 332 240401, Fax +256 313 260307
Jlnja Office: Nalubaale Power Sution
P.O. Box 942,Jinja. Tel +256 332 240400. Fax +256 332 280306
Email: [email protected], www.eskom.co.ug
Registration Number 26021