Uganda - Institutional strengthening in the energy sector

/,' v ' , @ -.' , , Joint UNDP/W6rId Bank K Energy Sector Managemernt Assistarnce Program U.) ;> , , , ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~'C' r?, : . -~ .OkActivity CompIetionReport - No. 029/.85 C'~~~~~~~1 J 0 ~~.04 J Cou,ntry: uqwAN Activty:. INSTITUTIOXNA STRENGTHENI1NG IN E ,ENERGY SECTOR J.ARY 1985. , .~~~~~~~~~~~~~~~~~~~~~4 ..3 C. ^~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~' !~S CPIY AVAILAP-LE Report of trhe joi UNDPIWofI Bak Energy Sector Managerfent Asistance Prog This document hasI a restricted distribution. Its contents may not be dislosed without authorization from the Government, the UJNDP or the Worl,d Bank.  MERGY SECTOR AA@U U ASSISTANCE P. ' Acttvittes CozpleSed Date Completed Enptgy Assessment Status Report Papua New Guinea . July, 1983 Mauritius - October, 1983 Sri Lanka .. , January, 1984 Malawi ' January, 1984 Burundi- JFebruary, 1984 Bangladesh April, 1984 Kenya May,'"1984 RwAnda May, 198 ' Zimbabwe August, 1984 Ugandd . August, 1984 Indone;ia September, 1984 *Senegal October,, 1984 'Sudan Noveii6er, 1984 Nepal . Januairy, 1985 'Project Formulation and Justification Panama Pow.r Loss Reduction Study June, 1983 Zimbabwe Power Loss Reduction Study June, 1983 Sri Lanka Power Loss Reduction Study June, 1983 Malawi Technical Assistance to Improve the Efficiency of Fuelwood " '''~9,> - :- Use in Tobacco Industry November, 1983 3 2 Kenya Power Loss Reduction Study March, 1984 "Sudan Power Loss Reduction Study June, 1984 Seychelles Power Loss Reduction Study. .,August, 1984 Instit4tional and Policy Support Sudan Management Assistance to the Ministry of Energy & Mining May, 1983 Burundi Petroleum Supply Management Study December, 1983 Papua New Proposals for Strengthening the Guinea Department of Minerals and ,nergy October, 1984 Papua New '. Guinea . Power Tariff Study October, 1984 Costa Rica Recommended Techg AsstX. Ptojects November, 1984 ., !e~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~' .) ,~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~'  UGADA INSTITUTIONAL STRENGTHENING IN THE ENERGY SECTOR JANUARY 1985  Fiscal Year July 1 - June 30 ABBREVIATIONS AS Assistant Secretary EPC Energy Policy Committee ESMAP Energy Sector Management Assistance Program JPC Joint Petroleum Committee MLWR Ministry of Lands, Minerals and Water Resources MPED ' istry of Planning and Economic Development MPPT Ministry of Power, Posts ant Telecommunications PAS Principal Assistant Secretary SAS Senior Assistant Secretary TA Technical Assistance TOR Terms of Reference UEB Uganda Electricity Board UNDP United Nations Development Program USAID United States Agency for International Development kWh Kilowatt hour BTU British Thermal Unit  TABLE 0F CONTES Page SUMMARY AND RECOMMENDATIONS*....... ............... 9*... i I* INTRODUCTION.o. ooo......o...o............................. 1 II. ENERGY SECTOR AND POLICY.................................. 3 III. THE INSTITUTIONAL FRAMEWORK ............o................... 5 Central Government. ...... ..... .9 *09*9,* .............. 5 The Ministry of Power, Posts and Telecommunications... 5 The Forestry Department..... ............... .0..... O 6 The Geological Survey and M4nes Departmert............ 6 The Bank of Uganda . .. ....... ............................. . . ........ .... ... 7 The Uganda Electricity Board............................ 8 The Oil 9............................................. ... 9 International Aspects................................. . .................... 10 Other Agencies and Interests... ........................o 10 The National Research Council......................... 10 Makerere University.....................0................ 10 IV. PRESENT INSTITUTIONAL WEAKNESSES ......... 4.............o... 13 V. POLICY COORDINATION.. .............................. 18 VI. THE ENERGY DEPARTMENT IN r E MPPT .........................o 20 Organization and Structure of the Energy Department..... 21 Staffing ...... ... ...... ......... ... ................... 23 Relationships with Other Bodies......................... 27 VII. STATISTICS AND INFORMATION SYSTEMS ............. o ........... 32 Library... ........ ...... ............................ 33 Computerization.... ................................ . .... 34 VIII. TRAINING ...................... ................. 36 IX. TECHNICAL ASSISTANCE .............. ooooo.*....... qo 38 X. WORK PROGRAM.............................................. 42 Annex 1: List of Persons and Institutions Consulted.............. 47 Annex 2: Technical Assistance Support: Draft Terms of Reference..***,,,,*,,,.................... 49 Figure 1: ENERGY SECTOR INSTITUTIONS .............2................ Figure 2: ?IRST STAGE .................... 25 Figure 3: SECOND STAGE ............... . .  SUIIARY AND RECOMMRMDATIONS l. The purpose of this reviev 1/ is to examine the institutions and organization of the energy sector in Uganda, identify its present weaknesses and recommend ways to overcome Lhem. The report, carried out under the joint UNDP/World Bank Energy Sector Management Assistance Program (ESMAP) focuses particularly on the role of the new Energy Department which is being set up in the Ministry of Power, Posts and Telecommunications (04PPT). This department tas been charged with the responsibility for formulating recommendations for, and regulating the implementation of, all aspects of energy policy. 2. Developing an effective energy policy requires zhat decisions and actior. affecting the supply and use of all forms of energy be con- sidered both as a whole and in relation to each other. Institutional arrangements must reflect this. Two central Ministries are responsibli for Uganda's general economic and planning policies: the Ministry of Finance (MOP) and the Ministry of Planning and Economic Development (MPED). In the energy sector, the MPPT is responsible. for electricity and petroleum policy, but many other Ministries have important interests both in energy supply (e.g., the Forestry Department) and in energy demand (e.g., Industry and Transport). The Bank of Uganda is responsible for the foreign exchange aspects of oil procurement, and the Uganda Electricity Board, a public corporation, is responsible for electricity supply. Six international oil companies share responsibility for the supply of petroleum products. Other institutions with important energy interests include the National Research Council and Makerere University. 3. Most of the present shortcomings in the energy sector, which affect the supply and use of all fuels, result from the general decline in the economic infrastructure and the administration which occurred in the 1970s, the lack of an institutional focus for energy policy-making, and weak linkages between the very diverse egencies concerned. Many staff working in the energy field lack experience and technical expertise in the industries for which t'1ey are responsible, flows of statistical and other information are rucimentary, and consultation is ad hoc and unsystematic. 4. The coordination of energy policy at all levels is most impor- tant. One way to achieve this at a higher level would be to create a Ministerial Energy Policy Group. However, such a group might, in effect, form an additional tier in the hierarchy between MPPT and the Cabinet, 1/ The report is based on the findings of a mission comprising Messrs. Ziad Alahdad (Energy Planner) and T.A. Kennedy (Consultant), which visited Uganda in May-June, 1984. Mr. Kennedy prepared the report. Issues identified in this report were discussed with the Government of Uganda during che Institutional Review Mission.  - ii* - thereby inhibiting rather than facilitating the decision-making process. The Government feels that the pr.,ent arrangements which allow informai contact at the Minister's level, are adequate. Therefore, a more appro- priate mechanism for achieving the coordination would be at the working- level and for this reason, it is resoomended chat an interdepartmental Energy Policy Committee be set up to include all the relevant Ministries. It should be chaired by the Head of the Energy Department, and the Energy Department would also provide its secretariat. The Committee would monitor ald coordinate policy issues, planning and development programs in the energy sector and initiate studies and policy actions as required. The method of operation of the Committee would be determined by the Head of the Energy Department and the Energy Advisor in such a way as to optimize the role of the Committee in the integrated planning process. 5. It is recommended that the Energy Department be built up over a two-year period to contain four specialist sections for a) electricity; b) petroleum; c) woodfueLs and renewables; and d) energy efficiency and utilization, and a fifth planning and central services section for internal coordination and management, the development of information systems, analysis and planning. The Department would be directed by an Energy Commissioner and a Deputy Commissioner and supported by a long- term Energy Adviser. 6. A nominal complement of 14 administrative and professional posts to staff the Department for FY85 already has been approved in principle. It is recommended that initial emphasis We placed on hiring economists and statisticians, and that in the second year of operation, another 6 posts be established to bring the total complement up to 20. It is recommended that, as far as possible, even the administrative/managerial positions in the Department be filled with professionals with energy-related professional backgrounds. This will enhance the professional capability of the Department ab a whole. 7. The Department will need to ensure that its plans and policies are developed in the context of national macroeconomic programs and close relationships will need to be established between it and the Ministry of Finance and Ministry of Planning and Economic Development. In the elec- tricity sect4r, it is recommended that the UEB should prepare an annual statement of progress and objectives within its long-term program for approval by the Minister, and also chat she Electricity Consultative Council should be re-established and include an Energy Department repre- sentative. The petroleum sector involves the six oil companies (which already coordinate their dealings with the Government), the Bank of Uganda's Petroleum Desk (foreign exchange aspects of petroleum product imports), the Ministry of Finance (on internal oil pricing), as well as the Energy Department (on internal distribution arrangemer,s and the overall energy policy implications). The government has dezided that the Petroleum Desk would be responsible for providing oil import data and analysis to the Energy Department to assist the Department in preparing policy recommendations for cqnsideration at the Ministerial/Cabinet  - iii - level. It is recommended that these various responsibilities should be coordinated through an official Joint Petroleum Committee o0 the two Ministries and the Bank of Uganda. It is also recommended that the Government representatives on the three part-Government-owned oil com- panies should be kept regularly briefed on energy policy matters. One way of achieving this would be for the Government to appoint senior staff of the Energy Department to some of the positions reserved for Government nominees on the boards of oil companies operating in Uganda. It is recommended that the Petroleum section of the Department be strengthened by employing short-term advisors specializing in petroleum supply arrangements, pricing, and economic analysit. Other government agencies concerned with petroleum matters should also be given the opportunity to work closely with the advising specialists. In the woodfuels sector, it is recommended that consideration should be given to the secondment of a suitable Forest Officer to strengthen the section in the Energy Department and also that a short-term Woodfuels Adviser should be appointed within the TechnicaL Assistance program discussed below. If possible, the head of the section should be a professional with experience in the production and utilization of woodfuels. It is recommended that a Woodfuels Development Committee should be set up to coordinate activities related to both the supply and use of woodfuels. The Energy Efficiency Section in the Department will initially monitor and provide overall direction to existing energy audit and conservation programs but should work towards producing a national energy efficiency program ty the end of its first year; in support of- this, it is recommended that a short-term specialist adviser should be included in the technical assistance package. 8. A senior member of the Energy Department should be appointed to the National Research Council to stimulate interest in energy related research and focus it towards priority areas and to encourage a greater emphasis on the application and dissemination of research work. The Social Science faculty at Makerere University should be encouraged to pursue research projects in the economic and social aspects of energy policy. 9. A ;onsiderable strengthening of the Department's statistical and information system will be required with work being concentrated on building up improved reporting procedures, the establishment of reliable time series of energy data, price statistics, and fuel and energy balances. New surveys and data will be required particularly on energy demand and utilization. It is recommended that a short-term Statistics Adviser should be appointed as quickly as possible within the Technical Assistance program. While the most urgent need is for the statistical staff to develop a full manual familiarity witn the energy data system, it is recommended that a small computer installation should be provided for data storage, retrieval and tabulation and later for energy model- ling and forecasting work. A computer training program should proceed in parallel.  - iv - 10. The Department will need a training program to improve the technical capability of the staff, and this will range from on-the-job experience and local training to the provision of short specialist courses on energy planning, project appraisal and management, petroleum economics, etc. It is recommended that the resources of the Institute of Statistics and Applied Economics at Makerere University should be called on to organize an energy economics and statastics seminar in the early part of the first year of operations. 11. The package of technical assistance measures which have been recommended to Launch the Department's work program and strengthen its organization in the early stages, i.e. the six specialist advisers and the equipment and training proposals, is estimated to cost about US$670,000. In engaging specialist advisers, advantage shouLd be taken of the availability of specialists with multi-disciplinary skills to reduce overall costs. In particular, it may be possible to find a specialist competent to handle the work of the petroleum economist and the oil pricing specialist. The phasing of the technical assistance and a work program showing specific outputs are given on pages (iv) and (v). Although the work program has been described in substantial detail (Chapter X), it is envisaged that minor mid-course corrections will need to be made in aspects such as the type and duration of specialist support engaged. Howev4 , such alterations should not result in deviation from the goal of establishing an appropriately staffed and adequately trained Department by the end of the two-year program. Alterations would be based on the progress achieved and the need for concentrating on especially weak areas and would be recommended jointly by the Energy Commissioner, and the Energy Advisor and would be reviewed by the financing agency. 12. The Department's work program should concentrate in the first year on establishing and building up its administrative and working procedures, setting up the various coordinating mechanisms which have been recommended, strengthening the statistical and information system, and pursuing a number of analytical projects on energy pricing, demand analysis and fuel availability, with a view to preparing a preliminary paper oi. national energy planning by the end of the first year of operations. This paper would be developed into a more comprehensive national energy plan in the following year and would form a part of the overall national economic development planning process. 13. The Institutional Review Mission received the full and willing cooperation of the Government and other bodies throughout its work which greatly eased its task; the mission would particularly like to express its appreciation to the officials of MPPT who helped so much in carrying out the program and in providing accommodation and office facilities.  v Energy Department: Output and Activity Objectives: Preparatory Period In the period leading up to the implementation of the TA program -d the full operation of the Department the following actions would be tequired: (a) Recruit all new local staff for first stage as provided for in the 1984-85 b,udget; (b) Provide office accommodation, basic furniture and equipment; (c) Implement Departmental organization and reporting procedures; (d) Initiate work program as specified in paragraphs 10.3-10.10 including preparation for main committees (EPC and JPC); (e) Obtain approval for TA funds; and (f) Prepare TORs and work programs for TA advisers. During the next two years the following actions would be required. Year I First Quarter (a) Establish the modus operandi of EPC as soon as possible after arrival of Energy Adviser; (b) Establish JPC with main task to speed up production of monthly oil reports; pc) Begin formal discussions with UEB on reconstitution of Electricity Consultative Council; (d) Commence reorganization of statistical system when adviser arrives. Second Quarter (a) Review efficiency and conservation program with Efficiency Adviser; (b) Prepare constitution of Energy Uses Advisory Committee; (c) Begin publication of monthly oil reports; (d) Produce first issue of quarterly statistics bulletin; (e) EPC to consider joint paper from Energy and Forestry Departments on woodfuels situation;  - vi - (f) Prepare Departmental staff development program including computer training. Third Quarter (a) JPC to produce report for EPC on petroleum situation and outlook with views of Petroleum Advisers; (b) Commissioner to prepare report for Ministers on first six months of Department's work; (c) Prepare draft energy efficiency and conservation program: (d) Hold first meeting of Electricity Consultative Council; (e) UEB prepare electricity planning paper for submission to EPC. Fourth Quarter (a) Prepare paper on energy planning and planning work program for Year 2; (b) Begin computerization of data base, energy balances, etc; (c) Prepare paper for EPC on energy pricing strategy; (d) Recruit local staff for second stage. Year 2 First Qhuarter Reorganize woodfuels and efficiency work to two separate sections, and set up Woodfuels Development Committee. Report to Ministers on first year's activities. Second Quarter Review staffing and organization of Department and progress of institutions. Third Quarter Begin draft of the national energy plan. Fourth Quarter Complete draft of the energy plan.  Technical Assistance Program Beyond the Year I Year 2 first Total Quarter 1 Quarter 2 Quarter 3 Quarter 4 Quarter I Quarter 2 Quarter 3 Quarter 4 2 Years man-moths Advisers Etiergy Advlber I j 24 btatlistics Adviser - | -- I I I | 4 tulfuileum Supplies Adviser - I - I-| 4 Fltroleum Pricing Adviser - I - I 4 Petroleum Economist 4 _ I I I * | _ Woodtuels Adviser 4 _ I I I | Itticiency Adviser - |--| |- | 4 us$000 tx tpnditure tUSS000) Lnergy Adviser 20 30 30 4 30 30 30 30 30 20 250 Sististic Adviser 10 10 to 10 40 Ptstroleumn Supplies Adviser 12 12 12 12 48 Pelroleum Pricing Adviser 12 12 12 12 48 lPetroleum Economist 12 12 12 12 48 Woodfuels Adviser 10 10 10 10 40 Ctficiency Adviser 10 10 10 10 40 ltuipment 11 20 5 36 lridining 10 10 10 10 10 10 60 120 Total . 53 126 57 84 62 72 86 50 80 670  I. IUTRDUWCTION 1.1 This Report has been prepared as a part of the joint UNDP/World Bank Energy Sector Management Assistance Program (ESMAP) as a first stage in the follow-up to the recommendations contained in the Energy Assess- ment Report which was published in July 1983 under the title "Uganda: Issues and Options in the Energy Sector." This Report identified the urgent need to strengthen the management and coordination of the energy sector which, like the rest of the economy, had suffered severely during the 1970s. The main problems are the high cost of imported petroleum, a shortage of electricity capacity for medium- and long-term development, a shortage of fuelwood, and low efficiency in the use of all fuels. Al- though some of the operational agencies in the sector have survived in relatively good shape,'most notably the Uganda Electricity Board and the branches of the international oil companies which operate in the country, none were problem-free. Little maintenance and investment had been possible in the electricity system and the procurement, transport, and distribution of petroleum product supplies have also been beset by many difficulties. The rest of the institutional structure is weak, fragmented, and poorly coordinated and this is recognized to be a major obstacle to the development of the energy sector. 1.2 One particular limitation was the lack of any gingle insti- tution within the Government which could take the lead in policy making, planning, and investment. The Uganda Government recognized this defi- clency and, in line with the recommendations of the Assessment Report, decided that an Energy Department should be established within the Ministry of Power, Posts, and Telecommunications (MPPT). In the Revised Recovery Program of October 1983, the Government announced that the new Department would be set up "to coordinate Government policy on all forms of energy, including energy saving measures." 1.3 During March 1984, a World Bank Mission visited Uganda to iden- tify a program of technical assistance under ESMAP. As part of this, the Government requested urgent short-term assistance to undertake an Institutional Review which would consider all the administrative and organizational arrangements in the energy sector, and would focus parti- cularly on the structure and role of the new Caergy Department and its relationships with other energy-related institutions and agencies. The Review would define the structure, staffing, and responsibilities of the Department and examine ways in 'which coordination between it and the other Governmental, parastatal and private agencies in the sector might be improved. It would also consider what further technical assistance and training arrangements might be required. 1.4 The Mission to undertake the Review arrived in Kampala on May 18, 1984, for a period of one month, during which time discussions were held with all the concerned Ministries and other bodies involved in the energy sector (Annex 1).  -2- 1.5 At the close of the Mission's visit to Uganda, on June 15, 1984, a meeting was held with representatives of concerned Ministries, the Uganda Electricity Board (UEB), the oil companies and other bodies to discuss an Aide Memoire which outlined some of the preliminary conclu- sions and recommendations of the Institutional Review, especially relat- ing to the structure and staffing of the new Energy Department, its initial work program and proposals for technical assistance to strengthen the institutional arrangements. 1.6 The outcome of this meeting was a broad agreement on the recommendations which were made and the need for careful definition of the functions and responsibilities of the various agencies involved, including the Energy Department. However, some reservations were expressed in relation to the role which Ministers might play in the formative stages of policy making. Both of these issues are discussed in this Report.  -3- II. ENBCT SECTOR AND POLICY 2.1 The energy sector in any economy consists of all the arrange- ments which exist for the supply, distribution, and use of all the forms of energy which are required to provide heat,-light, and motive pewer to the people of the country, or for export. Energy policy is concer'.ed with ensuring that the way in which these resources (whether locally pro- duced or imported) are organized and used, is carried out with maximum efficiency. 2.2 All countries have specific policies relating to individual forms of energy or to particular aspects of their use, and Uganda is no exception. Legislation exists governing electricity supply, petroleum distribution, and woodfuel resources. Prices of most commodities in the energy sector are controlled. Certain traders are licensed. But the concept of the "energy sector" and the associated idea of "energy policy" goes further and suggests that policies for the supply and use of all fuels should be considered as a whole. 2.3 The reason for this is that in many areas there is a high elas- ticity of interfuel substitution while there is a low elasticity of demand for all fuels -- i.e., "energy." As a result of this, the supply of and demand for individual fuels, is highly interactive and each is sensitive to what happens to the others. Some degree of' central guidance and control is necessary because in the energy sector there are generally only a small number of suppliers (such as monopolistic public utilities, or oligopolistic oil companies) and very long investment lead times, as well as important external factors relating to environmental, health and safetj, and other social considerations. Capital investment programs need to be coordinated to ensure adequate supply and efficient use of resources. 2.4 The institutions which together are responsible for the supply and use of energy are varied and consist of Government Ministries and Departments, Public Corporations, private companies (which may be locally based or parts of multinational corporations), as well as many other agencies of an academic, research, or technical nature. There are also millions of energy consumers whose interests may be expressed either individually through the markets for fuel products or collectively through statutory or voluntary organizations. The relationships and linkages between all these institutions are of primary concern to the central Government agency which is responsible'for the administration and coordination of national energy policy. 2.5 In Uganda, as in all developing countries, the energy economy is in two main parts: the commercial and the non-commercial (subsis- tence) sectors. The latter is by far the larger, accounting for an estimated 80% of Uganda's 'total energy consumption. Moreover, its activities, especially in relation to fuelwood production and utiliza- tion, have major energy policy implications. However, the sector is not  -4- significantly institutionalized and the means by which its performance may be improved are quite different from those which are appropriate to the smaller but more organized comnercial sector where conventional economic planning techniques and procedures can be applied. 2.6 The boundary between the commercial and non-commercial sectors is constantly shifting and the nature of these shifts and the determi- nants of them are themselves an important area of concern to energy policy. The supply of fuelwood has to meet the demand of both cash and subsistence consumers, and the extent to which commercial fuels such as kerosene and eLectricity begin to penetrate the subsistence sector as living standards rise is an important and dynamic ingredient of energy policy both in terms of human welfare and in its overall economic implications for the changing balance of fuel demand. 2.7 A further factor which needs to be taken into account in the making of energy policy is that it has to be undertaken in conditions of considerable uncertainty. This is partly because investment lead times are long, as in the case of major capital projects in electricity genera- tion or the provision of new woodfuel supplies, but also because of the unpredic:able influence of external factors, such as tl.e state ot world oil markets, and lack of precise knowledge about future supply conditions and consumer responses to changes in absolute and relative price levels. These uncertainties mean that energy policy must be framed in terms of long time horizons and that provisions must be included for the progressive firming up or modification of policies as the uncertainties are resolved. It follows that the institutionai and organizational structures within the energy sector must be capable of taking account of these requirements and responding quickly and flexibly to changing circumstances.  -5- III. THE INSTITUTIONAL FRANEWORK Central Government 3.1 The organization of the Government in Uganda is still broadly based on the British Parliamentary system with the top level of decision- making residing in the President and the Cabinet. Although the Cabinet is a large one, with about 30 Ministries represented in it, recent poli- tical circumstances have led to a considerable concentration of authority in the Presidency and its Office which holds the portfolios of Finance, Foreign Affairs and the Armed Forces. The three Ministries which are responsible for the overall management of the economy, which includes the energy sector, are the Ministry of Finance, the Ministry of Planning and Economic Development (MPED) and the Ministry of Regional Cooperation. Closely associated with these is the Bank of Uganda which, in addition to its general monetary responsibilities, has a special role in energy matters through its control of the foreign exchange required for imported fuels. rn addition, where energy matters involve interaction with other countries, e.g. in the export of power or import of petroleum products, the Ministry of Foreign Affairs needs to play an important role. 3.2 The sectoral Ministries -- Agriculture and Forestry, Lands, Minerals, and Water Resources, Industry, Transport, Houslng-, Local Gov- ernment, Health, Education, etc. -- include the Ministry of Power Posts and Telecommunications within which the Energy Department has been given the leading coordinating role so far as energy matrers are concerned. Many of the other Ministries already have substantial and well estab- lished interests in particular aspects of the energy sector, -either operationally (as in the case of the Forestry Department under the Ministry of Agriculture and Forestry) or as representing major consumer interests (as in the case of Transport, Industry, Housing, and other sectors). Up to now, these have not been drawn into the overall concept of "energy policy" as discussed in the previous section and neither has there been any systematic involvement of energy considerations in the broader processes of national planning and development. The relations between sectoral and central economic Ministries are dealt with below. 3.3 The structure of the Civil Service in Uganda is also largely based on the British system which was inherited on Independence in 1962. The senior civil servant in each Ministry is the Permanent Secretary who reports to the political Minister, and he is supported by administrative, executive, and clerical staff as well as by technical support groups such as economists, accountants and statisticians. The Ministry of Power, Posts and Telecommunications 3.4 This Ministry, which has the central policy making, planning, and coordinating functiotr in energy macters is at present a small Ministry with a total ac.ff complement of about 50, of whom under 20 are  -6- administrators or professionals. It is divided into three main groups under the Permanent Secretary: the first deals with Posts and Telecommu- nications (which is not considered within the terms of this Review); the second is led by an Under Secretary and deals with Finance and Establish- ment matters, and the third which consists of two smulL sections dealing with electricity and petroleum. The electricity section is headed by a Senior Assistant Secretary who is supported by a Statistician, and has certain regulatory functions prescribed in the 1964 Electricity Act relating to the Uganda Electricity Board and its accountability to the Minister. The petroleum section is also headed by a Senior Assistant Secretary with a Statistician and an Economist who collect data provided by oil companies operating in Uganda, maintain liaison with the industry and with the Bank of Uganda and Ministry of Finance on oil matters, issue licenses to petroleum product dealers under the petroleum legislation and are also responsible for the operations of the District Fuel Committees who are required to keep the fuel supply situation (especially petroleum) under review on a countrywide basis. The Forestry Department 3.5 This Department of the Ministry of Agriculture and Forestry is concerned with the management of the country's forest resources which includes the supply of woodfuel and charcoal. This involves the management of existing fuelwood resources, as well as efforts to increase forest acreages and the encouragement of tree -planting by individual farmers. The Department is headed by a Chief Forest Officer who is assisted by a Deputy and three S9nior Forest Officers responsible fo; Resource Management and Finance, Planning, and Administration. Although the Department is relatively well staffed with a network of Forest Officers, budgetary constraints and communications difficulties have caused management, administration and control to be severely weakened in recent years. As a result, there are no up-to-date annual reports of the Department's activities, and although monthly returns are submitted from the districts to headquarters, it is very doubtful whether they represent an accurate account of the supply and use of resources. A number of projects are currently planned or in progress to carry out forest inventories, expand fuelwood plantations, and improve the general management of the fuelwood sector. The Department also has interests in the utilization of timber and woodfuels which will be of particular concern to the new Energy Department. The Geological Survey and Mines Department 3.6 Under the Ministry of Lands, Minerals and Water Resources, this Department is responsible for the prospecting and mining of all minerals in Uganda, including petroleum exploration and geothermal energy. Aeromagnetic surveys have been carried out in the Lake Albert area in the northwest of Uganda as part of a wider regional exercise involving Zaire, Tanzania, and Kenya, and reports including interpretation of the survey results have been prepared. A promotion meeting was held on November 29- 30, 1984, to offer the reports on the surveys for sale to interested oil  -7- companies. The Government has allowed until March, 1985, for oil companies to present their bids for exploration acreage. In case of commercial discovery, the government would have the option to purchase a participation in the venture, but it is the government's policy not to invest in exploration. The time horizon for exploration activities is likely to be a long one and, even if commercially viable reserves are proved, no significant contribution to Uganda's energy supplies would be likely until the 1990's. The need fo- close cooperation between the Energy Department and the Ministry of Lands, Minerals, and Water Resources is therefore also of great importance. The Bank of Uganda 3.7 The Bank of Uganda not only has the customary central banking role in overall econopic management, but has special interests and involvement in the energy sector. The country is at present wholly dependent on imports for its supplies of petroleum products and this is likely to continue for at least the next decade. In 1982, the Government established a Petroleum Desk within the Research DepartmenX. of the Bank of Uganda in order to manage the foreign exchange aspects of petroleum product procurement, transportation and import, and relations with the oil companies in thK e matters. The internal distribution of petroleum product supplies is the administrative responsibility of the MPPT, and the Ninistry of Finance is in the lead so far as internal pricing is con- cerned. In 1983, the Petroleum Desk was given specialist support under the Energy Sector Management Assistance Program (ESMAP) to improve the monitoring of the petroleum import arrangements. 2/ In addition to recommending a more systematic and rigorous recording of petroleum import information, the Mission proposed that the management information system should be improved by: a) preparing regular monthly oil situation reports; b) developing closer liaison with the oil companies operating in Uganda; and c) making additional technical assistance available to the petroleum sector by providing expertise in petroleum supplies, pricing, and forecasting. These proposals are endorsed and included in the recommendations of this review. 3.8 The Petroleum Desk is at present well staffed with about eight officials drawn from the Bank's Research, Foreign Exchange Operations and Exchange Control Departments and has made a good start in the operational management of petroleum imports, in the improvement of the data and information systems and in strengthening and formalizing liaison with the oil companies. It also has established good, if still informal, working relations with the MPPT and the Ministry of Finance. However, by June, 1984, only one quarterly oil situation report had been prepared (for the first quarter of 1983) and an annual report for 1983 was still only in an 2/ The Mission was carried out by Mr. Turgut Ogmen, Consultant.  -8- advanced stage of preparation. The Ugandan Government has decided to maintain the services of the Petroleum Desk as a subsector support agency responsible for providing essential data and analysis relating to petroleum product imports and distribution to assist MPPT and other concerned Ministries in formulating policy recommendations. The Uganda Electricity Board 3.9 The Uganda Electricity Board (UEB) is a public corporation, first set up in the 1950s, whose role in the provision of electricity supplies and whose accountability to the Government is defined in the legislation, the most recent of which is the Electricity Act of 1964. The Board, which consists of a Chairman and between five and eight members, is appointed by the Minister who is empowered, after consultation, to give the Board directions of a general character which may be required in the public interest. The Board is also required to act in accordance with a general program which is settled from time to time in consultation with the Minister. It is further required that the Board shall give the Minister facilities for obtaining information about its property and activities and provide him with such returns, accounts and other information as he may reasonably require. 3.10 It is clear that this legislative framework provides a full basis of accountability on the part of the Board and also for the inte- gration of its activities into the wider structure of national economic and energy policies. In addition it provides for the establishment of a Consultative Council of not more than twelve members representing local authorities, agriculture, commerce, industry and other consumers. The Council is charged with the duties of advising the Board and the Minister on any matters affecting the distribution of electricity, vari- ations in tariffs, and the provision of new services. The Board, for its part, is required to inform the Council of its general plans for supply- ing and developing electricity in Uganda. This Council is potentially an important part of the general energy planning process, but unfortunately it has been defunct for several years. Its future role is discussed later. 3.11 Altogether, the Board's activities have been extremely success- ful in maintaining electricity supplies throughout the whole of Uganda's recent history. However, the level of investment has been very low and a major program of rehabilitation as well as new capacity is currently planned. The Board's technical achievement in maintaining supplies has been principally due to the high quality of the management and the importance which has been attached to the training of local staff. It was noted in the 1983 Energy Assessment, however, that there was a poten- tial weakness in the area of development pLanning which could become increasingly evident as the capital program is implemented and as the greater integration and coordination of the energy sector proceeds.  9. The Oil Companies 3.12 Six international oil companies are responsible for the impor- tation and marketing of all petroleum products in Ugandas Shell has a little under a third of the market, Total about one fifth, Caltex, Esso, and Agip about 15% each, and Mobil, just under 10%. Three of the com- panies operating in the country have a 50% Government shareholding (Shell, Total, and Agip) with participation exercised by the appointment of the Board Chairman and up to half of the directors. Operational con- trol, however, effectively rests with the companies' executives and managers. Because of the supply and foreign exchange problems which have existed in recent years, the companies have found it useful to work closely together in their dealings with the Government. One of the results of the World Bank mission on petroleum import arrangements was to improve contacts and liaison between the companies and officials of both the Government and the Bank of Uganda through regular meetings covering not only the financial aspects of oil procurement, but also wider issues of petroleum product supply. 3.13 While the Bank of Uganda has been the principal Government agency dealing with the oil companies in relation *to petroleum supplies outside Uganda, a number of other Ministries have also been concerned in such matters as road versus rail transportation and also in the internal distribution and pricing arrangements. The prices of four major petro- leum products (premium and regular gasoline, automotive diesel, and kero- sene) are set by the Government, with the Ministry of Finance in the lead, according to a complex pricing formula which takes account of crude import prices, transportatior. operating costs and margins of the oil companies, and local taxation, etc. Other product prices Are determined by the companies in consultation with the Government. The distribution by the oil companies of petroleum products within the country is the administrative responsibility of the MPPT working within the framework of the Petroleum Act and subsidiary legislation and rules specified in various statutory instruments. Under these rules the Minister has con- siderable regulatory powers for governing the import, transport, and storage of petroleum products, for licensing of dealers and agents, and for obtaining regular and up to date returns and other information regarding the supply, distribution, and sale of petroleum products. As a part of the administrative back-up to these arrangements there is a national network of District Fuel Control Committees who are required to submit monthly returns to the MPPT on the local supply situation.  - 10 - International Aspects 3.14 As a landlocked country, dependent on imported supplies of petroleum and also exporting energy to neighboring countries -- at present principally electricity to Kenya -- it is clear that there is a foreign policy dimension to Uganda's energy situation. This expresses itself in a variety of ways: the terms and conditions governing the :ransport of petroleum products through Kenya, the development of alter- native supply routes through Tanzania, the re-export of petroleum products to neighboring countries, the possible extension of electricity exports to Tanzania, Zaire, and Rwanda, and of course, also matters aris- ing from Uganda's k'se of the water resources of the upper Nile. Although the Ministry of Foreign Affairs has been involved in these issues as they have arisen, it has not been concerned with them in the overall context of energy policy. Other Agencies and Interests 3.15 There are many other official and unofficial bodies which have a continuing involvement in energy matters. First of all, there are the general consumer interests which include households, commercial estab- lishments, industry, transport undertakings, schools, hospitals, and other public utilities. Some of these have channels of information and representation to Government and policy formulation, but others, especi- ally the domestic consumers, lack any effective means of expressing their concerns. The other side is that in implementing policy measures related to energy utilization, the Government's channels of communication are similarly diverse. The National Research Council 3.16 The Council is under the control of the Ministry of Planning and Economic Development and is responsible for the coordination of all research activities in the country which are carried out by independent academic institutions such as the Makerere University as well as Ministries which have research units. The Council has about 15 active members drawn from both the Government and the University and organizes its work under six committees. The Science and Industrial Research Committee deals with activities in the energy field. At present, the MPPT is not represented on the Council. The main energy-related activities with which the Council has been concerned have so far been in the area of renewable energy sources including biogas, solar heating, and charcoal. Makerere University 3.17 Makerere University has a long history of providing higher education in Uganda and has a number of Departments which make an  - 1.1 - important contribution in the energy field in the areas of training and research. It has, however, suffered a good deal in recent years because of a lack of funding, an over-expansion in numbers of students, losses of staff and equipment, and a lack of contact with the international acade- mic community. The main Departments and Faculties which have a consider- able potential contribution to make to work in the energy sector are: Engineering, Technology, Physics, Social Science, Statistics, and Applied Economics. The last of these, which is funded by UNDP, operates on an Africa-wide basis, although the majority of its students have come from Eastern and Central African countries. In addition to undergraduate teaching, it has sponsored a number of national and regional seminars as well as short specialist courses and there are plans for an energy seminar during 1985. 3.18 Figure 1 sets out the general framework of the institutions in the energy sector and the main relationships between them.  - 12 - Figure 1: ENERGY SECTOR INSTITUTIONS MPRESIDENT CASIIrT gank Ministry ministry Ministry CENTRAL of of of of aOOOMIC Uganda Finance Planning Foreign & EXTERNAL Affairs AFFAIRS .~~.p I ~.MPPT ISRcw MINISTRIES ENERGY DEPARTUMENT | Ministry Ministry zinis'tries of of of Agriculture Lands, Minerals I Ipdustvy, and and Transport, Forestry Vater Resources sousing, a1 nd other .nI /sur intaerests Forestry Geological Oil Petroleum SUNECTOR Department UEB Survey Co mnies Railways Desk -A==NCIS (Electricity NWeionat Make~rere Ts Consultative Research University BODIES Council) CouncilB NOTE: This chare does not represent organizational hierarchies and the MPPT (Energy Department) is only concerned with the energy interests of the other sectora!. Ministries.  - 13 - IV. PRESENT INSTITUTIONAL WEAKNESSES 4.1 The existing institutional and organizational structure of the energy sector reveals a number of areas which are in need of strengthen- ing. First, there are a number of across-the-board problems which have arisen as a result of the general decline in the economy and the adminis- tration which took place during the 1970s. These problems must be dealt with progressively and will therefore take some time to resolve com- pletely. Second, there are the more specific features of some of the individual institutions which inhibit their effective performance. Third, in several areas the unsatisfactory relationships and linkages between the various components of the energy sector are an obstacle to the development of an integrated approach to energy policy. 4.2 As the 1983 Energy Assessment pointed out, the lack of any one institution with a clear responsibility for energy planning and policy formulation has meant that decisions have been taken on an ad hoc basis by a number of different agencies and without sufficient regard to their impact on sector performante and development. The recognition of this led the Government to set up the Energy Department in the MPPT, but it has to be accepted that it will take some time to establish itself and to exercise the coordinating authority which is necessary. It will be required to build up working relationships and procedures with other Ministries and agencies which are already well-established and which have enjoyed a good deal of independent authority. 4.3 The country's general administrative weaknesses have resulted from the economic collapse of the later 1970s, the war and the break-up of the East African Community. Many skilled personnel left the country or sought careers outside the field of public service. Inflation severely eroded the value of public sector salaries leading to a loss of moraLe and declining effectiveness of the administration. Buildings and offices were not maintained and equipment was lost, looted or worn out and not replaced or repaired. Records were often lost and regular reporting procedures became erratic or were totally abandoned. Considerable efforts are being made by the Government to improve the situation. However, it will take several years for even the physical losses to be made good while the damage to morale and to administrative attitudes and procedures could take even longer to repair. 4.4 The situation is by no means uniform: the Uganda Electricity Board and the Bank of Uganda have continued to function relatively well, but Posts and Telecommunications and the Railway Corporation have suf- fered much more severely. Moreover, within individual agencies, some parts, often dealing with day-to-day administrative or technical matters, have remained remarkably effective while other activities, such as longer-term planning and coordination, have dwindled and declined. The result is an energy sector administration which has become weak and frag- mented. Another factor, which has affected the general situation is that because of the economic, poLitical, and security situation which faced  - 14 - the country after the war, a great deal of authority was necessarily concentrated in the Presidency and two key Ministries in order to deal with the most urgent priorities of national reunification and stability. 4.5 One particular difficulty is that much of the country's legis- lation is out of date and does not provide an effective framework of ground rules for determining responsibilities and providing the basis of administrative procedures. Some Ministries even lack easy access to copies of published legislation and regulations governing the sectors for which they are responsible. 4.6 A special problem which will be discussed later is the Lack of readily available data and information about the economy, its several sectors and its development. Much ef the information does exist, but it has not been systematically assembled and disseminated on a regular and continuing basis so as to provide an agreed and commonly acceptable fund of information on which judgments can be made and decisions taken. 4.7 So far as the particular weaknesses of the energy sector insti- tutions are concerned, the organization of the Energy Department in the MPPT is the subject of a separate section, but there are certain points which may be noted here. First, the Energy Department itself will have to take the lead in formulating clear policy objectives and it may well take some time to establish the Ministry's position in relation to the other agencies with whom it will have to deal. Its staff resources will not be large, and will lack experience and authority by comparison with relatively well-established subsector agencies such as URB, the oil companies or the Forestry Department. 4.8 At present, while liaison arrangements between the Ministry and these other bodies work quite well on a limited scale, they tend to be informal, ad hoc, and responsive to external events rather than system- atic, regular, and actively directed to meeting well defined objective>. There is no overall energy plan, no regular mechanisms of consultacion and no regular timetable of events to provide a continuing focus for its activities. These will all need to bwi developed, and a key element in this will be the proposed Energy Policy Committee described below (see paras. 5.5-5.8). 4.9 So far as the UEB is concerned, it has already been noted that its organization has been largely effective in carrying out its technical functions in providing and maintaining energy supplies. There are one or two areas, however, where there is a need to strengthen its activities in the planning and policy fields. The development of a more integrated approach to energy policy and the greater emphasis which will be placed in the next few years on the implementation of its large capital invest- ment programs will both make this necessary. The weaknesses that exist at present in these areas are the direct consequence of the under-invest- ment and lack of forward plantuing during the past decade.  - 15 - 4.10 A number of important studies are currently taking place or are planned in the electricity sector, dealing with the long-term demand forecast, options for additional power generating capacity, the extension and rehabilitation of the transmission and distribution networks, and financial accounting and management procedures. These may well have implications for aspects of the internal organization of the UEB. How- ever, the development and implementation of national energy plans and policies will also require further strengthering of planning and analy- tical capability within UEB. 4.11 There are two main areas that need to be strengthened. The first is the Consultative Council for the industry, which needs to be reconstituted. The second area is related to the requirements in the Electricity Act that the Board's activities should be carried out within the context of a general program to be approved by the Minister. This is explained more fully below (see para. 4.13). 4.12 The membership and general terms of reference of the Consulta- tive Council are prescribed in the Electricity Act, but these will need to be interpreted in such a way as to ensure that electricity issuea are seen within the context of energy poLicy as a whole. 4.13 It will be the task of the Energy Department of the MPPT to. establish the framework of -tne national energy plan within which the Board's "general program" will be formulated and this will call for addi- tional planning staff within the Commercial Department of the UEB. A number of major electricity projects are contained within the Revised Recovery Program, and they are cutrently being developed and extended in a major power development program. This program and its progress towards implementation will need to be monitored by the Energy Department as part of the process of ensuring the Board's accountability to the M1inister. This could be achieved by the Board reguLarly updating and rolling for- ward its own development plan on annual basis and setting out its strategic objectives for the medium- and long-term against which its physical and financial performance can be monitored. Such a rolling program would require annual approval by the Ministry and would provide a means of maintaining full accountability while preserving the Board's indevendence and freedom of operation. 4.14 Day-to-day relationships between the MPPT and the UEB are good and are aided by physical proximity because they share the same building, but the electri:ity section in the MPPT has only a very limited range of administrative and regulatory functions at present. It also lacks the technical knowledge of the industry which would enable it to have a full understanding of the Board's operations and problems. It is most impor- tant in a Ministry which is dealing with industries where there is a high technological content that the staff should be familiar with these concepts and be aware of their potential influence on policy. They should not have to duplicate or second-guess the work of the exoerts, but they do have to be able co conduct an informed dialogue with them. For  - 16 - this purpose, special training and familiarization programs will have to be devised. 4.15 In the petroleum sector, existing arrangements and procedures for petroleum product supply are extremely complex. The problems are compounded by the organization of the oil companies, which are subsidi- aries of internationally operating enterprises or joint ventures with the Government as shareholder. The 1983 Energy Assessment drew particular attention to the difficulties of oil transportation involving road, rail, and pipeline modes and also to certain unsatisfactory aspects of the refinery and pricing arrangements. Some of these are being dealt with by inter-Government negotiations, such as those related to railway tanker rolling stock, and also by the implementation of improved monitoring and liaison with the oil companies as recommended by the ESMAP Mission in 1983. A revised pricing formula for petroleum products is also currently under consideration by the Government. 4.16 The principal institutional weaknesses lie in the imbalance which exists between the oil companies, which are strong in commercial and operational expertise, and the Government agencies, which have limited resources and need to be able to.conduct a more informed dialogue with them and provide effective guidance in pursuit of national objec- tives. An effective technical assistance program for the. petroleum sector will go some way towards redressing this as will the development of clear energy policy objectives. A further problem lies in the present lack of a clear definition of the responsibilities of each of the Govern- ment agencies in relation to petroleum policy and some mechanism for focusing and coordihating their activities. It is proposed that this should be dealt with by the establishment of a Joint Petroleum Committee (see paragraphs 6.22-6.23 below). 4.17 Unlike the electricity and petroleum industries which are institutionally concentrated and well defined, the woodfuel and charcoal sector is much more diffuse and widely dispersed. It also encompasses both the commercial and subsistence sectors of the energy economy. It has the advantage, however, of being administered by a well-established and generally well-staffed Forestry Denartment, although standards of control and regulation have undergone a decline in recent years with the general deterioration of the rural economy. Records of forest stocks and data on fuelwood consumption are sketchy and inadequate for energy planning purposes although a number of projects to correct these deficiencies are being planned. In view of the large contribution of these fuels to the country's total energy supply as well as their ease of substitution with other fuels, especially imported kerosene, there is a critical lack of quantitative information and analysis on both the supply and demand prospects as well as on the economics of the industry. It will be a particularly difficult sector for the Energy Department to deal with, especially in the early stages when staff is likely to be limited and lacking in experience. However, the establishment of the Woodfuels Section of the Department, the appointment of a Woodfuels Adviser within the TA program. and the development of close liaison with the Forestry  -17 - Research Department should solve these problems, especially those related to woodfuels utilization activities. 4.18 Activities in the research field are limited by the lack of an adequately coordinated program of projects related to energy policy as well as by lack of funds. The work that is being done is generally carried out on an individual basis on the simpler technologies of renew- able energy, often repeating work which has been carried out outside Uganda and is insufficiently related to Uganda's particular conditions and potential applications. In addition, there is obviously an institu- tional problem which occurs when moving from the research stage of work to development, demonstration and dissemination. 4.19 Also, there appears to be little energy research which has an economic or sociological bias. For example, there is a conspicuous lack )f studies on energy consumption patterns with particular reference to seasonality in fuel demand, per capita consumption trends, demand elasti- cities, energy costs in industry and the determinants of inter-fuel substitution, all of which provide essential input into policy planning and analysis based on local conditions. 4.20 Perhaps the most fundamental weakness in the energy sector is the lack of reliable, up-to-date statistics on which planning and policy can be based. Although figures dealing with various aspects of the energy economy are collected and available, their accuracy and complete- ness varies, and they are not assembled, organized and processed in forms which enable, them to be put to use intelligibly and effectively. The main reason for this is that they are normally obtained from various subsector agencies such as UEB, oil companies or the Forestry Department, who collect them in the first instance for their own internal operational and management purposes or as a by-product of some administrative process. Such information is often sent to the responsible Ministry in a raw state where it is filed without further processing. If particular information is required at some later stage all the individual returns have to be scrutinized, checked for completeness and consistency of definitions, the relevant figures extracted and then aggregated and processed for the purpose in hand, all of which are laborious, time consuming and afford scope for error. The need is for standardized tables constructed on the basis of standardized categories relevant to policy issues and using agreed conventional definitions and conversion factors, into which the incoming raw data can be fitted after preliminary processing. An adequate statistical system for energy planning would require not only timely and reliable primary data, but also comparative and secondary statistics, index numbers, performance indicators, and energy balances. Constructing such a system within the Energy Department will require technical assistance support as well as close cooperation and consultation with the agencies which generate the primarv data and with the Statistics Department of the Ministry of PLanning and Economic Development.  - 18 - V. POLICY COORDINATION 5.1 The need for coordination in energy policy matters arises at all levels in the organizational structure from Ministers and Permanent Secretaries down through the various working levels of administrative and technical staff as well as horizontally between them in the separate Ministries and other agencies. Most day-to-day administrative, analy- tical and monitoring business is conducted at the official level but on matters having a high political content or which involve legislation or issues of national economic strategy, Ministerial involvement is called for. In the case of a new Department, where no established precedents and procedures exist it will be necessary to set up arrangements for adequate briefing and advice to be given to the Minister by his senior officials and he will need to ensure that his colleagues in other Ministries are kept aware of relevant energy issues on a continuing basis. At the highest level, the final collective agreement on policy is reached between Ministers in the Cabinet, but it is also the normal practice on specialized topics for prior discussion and consultation to take place within Ministerial Committees meeting on a regular or ad hoc basis. 5.2 Consideration has been given to the possible advantages of extending this practice into the energy field. In the 1983 Energy Assessment Report, it was suggested that an inter-Ministerial Committee should be responsible for the high level coordination of energy policy. However, this proposal was not favored by the Government and it was therefore modified in the Aide Memoire which was submitted by the Insti- tutional Review Mission in June 1984 to suggest less formal consultation arrangements. 5.3 Although there is littie doubt that exceptional circumstances or interdepartmental issues would call for ad hoc Ministerial consulta- tion outside the full Cabinet, it can be argued that with the setting up of the new Energy Department, its own Minister must be seen to take the lead and the additional responsibilities among his colleagues. Moreover, if effective coordination at the official level between Ministries is established, and if the internal processes of briefing and advice within each Ministry are also working well, then substantive policy issues are unlikely to reach the final decision-making level of the Cabinet unless the ground has been prepared in advance and all the relevant interests have been taken into account. This does, however, mean that Ministers must be kept fully briefed, must have access to all relevant information, and be confident that the procedures of policy analysis and formulation which take place at official level are as good as they can be. 5.4 For the present, therefore, it is not recommended that any new formal arrangements for Ministerial cooedination of energy policy should be set up, although some issues which extend across Departmental boun- daries such as the macroeconomic and financial aspects of energy policy as well as manpower and investment questions will call for Ministerial  - 19 - discussion and consultation from time to time. In the electricity sec- tor, questions related to tariff policy would require Ministerial coor- dination as would matters of petroleum pricing. On the other hand, general questions such as the consideration of broad pricing strategies would be initially worked out and discussed at official level. There still remains the need for a regular forum where the ongoing energy situation can be reviewed and monitored and where energy planning and policy can be discussed. It is important that the broad issues of energy policy should be debated among the concerned Ministries and other agencies with the aim of achieving a common approach before specific proposals are put forward for Ministerial and Cabinet approval. 5.5 To meet this need, it is recommended that a working-level Energy Policy Committee should be set up, to be chaired by the Head of the Energy Department (the Energy Commissioner), and with a secretariat provided by the Planning and Central Services section of the Depart- ment. The membership of this Committee should consist of senior official representatives from the main Ministries concerned with energy matters (i.e., Planning, Finance, Agriculture and Forestry, Industry, Transport, and the Bank of Uganda) at about Under-Secretary level, but not below Principal Assistant Secretary except for technical support. Other Ministries would receive Committee papers and be invited to attend as required. The detailed modus operandi of the Committee would be determined by the Head of the Energy Department and the Energy Advisor in such a way as to optimize the role of the Committee in the integrated energy planning process. A few suggestions regarding procedure are given below. 5.6 The Committee should meet at least monthly, but more often if necessary. The agendas of the meetings would consist of reports and studies by the Energy Department on a) the current situation of fuel supplies and demand; b) status of specific subsectors; c) the progress of investment programs; d) demand forecasts; and e) developments in the field of technical assistance. 5.7 Once a quarter, the Committee should be enlarged to include representatives from the UEB, the oil industry and other non-governmental agencies concerned with energy matters. These would be asked to provide progress reports on developments within their sectors and draw the atten- tion of the Committee to any matters of current concern to them. The results would be communicated to Ministers and Permanent Secretaries in an Energy Situation Report by the Energy Commissioner supplemented by au Energy Statistics Bulletin which would also be prepared on a quarterly basis and given wider circulation. 5.8 The Energy Policy Committee would thus become the main instru- ment of policy coordination. It would be the body where national and subsectoral energy plans and objectives would be first discussed on a collective basis.  - 20 - VI. THE EIERCY DEPARTMENT IN THE NPPT 6.1 The new Energy Department is responsible for formulating recom- mendations for, and implemention of, all aspects of energy policy in Uganda, and regulating the implementation of decisions on these matters either directly or through the other parastatal or private organizations working in the energy field. Its broad objectives are to ensure that the necessary measures are formulated and agreed upon for the ?rovision of adequate and secure supplies of energy and their efficient use in the national interest, The Department is to be the main centre of energy data and information within the Government to support the Minister in exercising these responsibilities. 6.2 The structure and working arrangements of the new Department should be realistic in relation to existing Government procedures and institutions and also to the resources of manpower which are likely to be available to it. It is primarily c3ncerned with policy formulation and policy advice, with planning and analysis and with the coordination of the activities of the other agencies which collectively make up the energy sector of the economy. It is not an executive agency although it does and will continue to have certain regulatory and other responsibi- lities which derive from existing legislation, and these could well increase over time. 6.3 The main tasks. which the Department will be required to carry out are: (a) to monitor all internal and external developments affecting the country's energy economy; (b) to prepare a national energy plan; (c) to recommend policies for the effective implementation of the energy plan; (d) to establish and maintain an accurate and up-to-date statis- tical/information system and carry out the necessary research and analysis in support of plans and policies; (e) to ensure that the supply and distribution of electricity by the UEB,, including its capital programs, are carried out in accordance with national objectives; (f) to ensure that the supply and distribution of petroleum meets the national needs; (g) to monitor the supply and development of woodfuels and other renewable energy resources;  - 21 - (h) to stimulate implementation of policies and measures to maximize the efficiency of energy utilization in all sectors; (i) to ensure the optimum development of the energy sector through appropriate pricing, investment, research, and technology policies; (j) to have due regard to environmental considerations in the pur- suit of energy policy; and (k) to provide advice to MPED and coordinate and monitor the activities of bilateral and multilateral donor agencies in the energy sector. 6.4 All these areas of work involve routine day-to-day administra- tive procedures such as Ministerial and Parliamentary business, prepara- tion for and attendance at meetings, writing and processing documents, and consultation with other bodies. In addition, the Departmenc will need to build up its data systems and its analytical capability in energy forecasting and modelling, sectoral and subsectoral demand studies, economic and financial appraisal, and other planning techniques. It is clear that with relatively limited and initially inexperienced staff resources the management of the Department's work program will need to be carefully organized and that some compression of staff duties and organi- zation will be required. Organization and Structure of the Energy Department 6.5 The new Energy Department will be built around the two already existing Electricity and Petroleum sections in the MPPT and its structure will need to take account of the main policy and work requirements out- lined in the previous paragraphs, the role and operations of the other existing subsector institutions, and the need for flexibility as the work program develops. The electricity and petroleum sections are each headed by an administrator at Senior Assistant Secretary level supported by two or three professional economists and statisticians. This is about the right size for a working section within a Department on the scale currently envisaged, but with the development of more active approaches to energy policy the content, quality, and technical and professional expertise of their work will need to be enhanced. 6.6 At present, the MPPT has no staff directly dedicated to wood- fuels, other renewable fuels, or energy utilization and efficiency. At least one, and later two new sections will need to be set up to cover these areas. Woodfuels, which form the largest component of Uganda's energy supply mix, are the responsibility of the Forestry Department of the Ministry of Agriculture and Forestry and this is where the opera- tional control will remain. However, the Energy Department will have to establish and develop close working links with the Forestry Department  - 22 - and be familiar with its technology and data systems as well as with its current policies and long-term plans in relation to overall energy strategy. The role of other renewable fuels (solar, biomass, etc.) is likely to be fairly small for some time although they could have some useful local applications in rural areas or for purposes such as crop drying and water heating. The Energy Department will therefore need to be familiar with the technical processes as well as the economic possibi- lities and limitations of these sources. They will have to develop con- tacts and liaison with the National Research Council and Makerere Univer- sity within Uganda and also with other experimental and developmental institutions outside Uganda, such as the Centre for Alternative Techno- logy in Nairobi. 6.7 The efficient use of energy has been identified as one of the main tasks of the new Energy Department, and it affects all aspects of the economic and rational use of fuels in households, commerce, irdustry, and transport. Initially, it is in the two latter sectors that work will be specifically concentrated through the programs of energy audits and efficiency surveys which are being carried out under the leadership of the Ministries of Industry and Transport. The efficiency section in the Energy Department will need to keep abreast of these studies, ensure their wide dissemination and be able to interpret their results in overall energy terms. It will also need to be able to take the initiative in identifying further and wider opportunities for energy saving and the avoidance of waste, not least in the fuel supply industries themselves, as well as in the domestic sector in the design of houses and other buildings. The responsible section will require both an administrative and a technological capability, and be provided in its early stages with short-term technical assistance in the general area of energy conservation. To supplement its own resources, which will be limited, an Energy Users Advisory Committee should be set up with its membership drawn from all the main consuming sectors and the Government Departments who are responsible for them, and charged with the task of identifying energy saving opportunities, publicizing information about best practices in energy utilization, and advising the Department on the initiation and implementation of energy efficiency programs. 6.8 In addition to the above tasks which are related to specific fuels and their efficient use, the Department requires a strong capabi- lity in general energy policy formulation, coordination, and planning. It needs to set up and maintain data and information systems for the whole Department and for the rest of the Government on energy matters and also carry out research and analysis to provide the basis for policy fo-mulation. These services and the planning role which accompanies them should be carried out by a section occupying a central position in the Department and reporting to the Energy Commissioner and his Deputy. This section would be the central planning staff of the Energy Department with predominantly administrative, economic, and statistical expertise and it would provide the secretariat for the Energy Policy Committee.  - 23 - 6.9 The top management level of the Energy Department, reporting to the Permanent Secretary and the Minister, would be provided by the Energy Commissioner (a post which it is envisaged would be at a Senior Under Secreti'..y level) and a Deputy Commissioner. The Commissioner would be respovsible for the overall direction of the Department and its work program and for giving high level advice and representation as required. The Deputy Commissioner, in addition to sharing overall management and directing duties, would have an operational and supervisory role as head of the Planning and Central Services Section. This top tier of the Department should also be supported by an expei;t 8ergy Advisor provided under long-term (at least two years) technical assistance arrangements. Terms of Reference for the Energy Advisor are included in Annex 2. Job descriptions of the senior management posts for the Energy Department are given in Annex 3. Staffing 6.10 Following the guidelines of the Energy Assessment Report of July 1983 and further discussions which were held with a WorLd Bank mis- sion in March 1984, the MPPT made a preliminary application to the Ministry of Finance for new -staff for the Energy Department. In May, approval in principle was given for the recruitment of eight senior staff to be added to the two Senior Assistant Secretaries, the two Statisticians and the one Economist already in post. (A third statistician in the MPPT is at present away on overseas study leave until the middle of 1985, while one of those at present in post will be away for almost a year from September, 1984). The eight new posts consist of the Energy Commissioner- (Senior Under Secretary), a Deputy Energy Commissioner (Under Secretary), a Principal Assistant Secretary, an Assistant Secretary, and four professional staff. These last were originally designated as Engineers, but in the light of the need for planning and information systems expertise in the early stages of the Department it is proposed that these should be recruited as economists and statisticians. However, it is recommended that, where necessary, the staff to be recruited should also have appropriate engineering backgrounds. Five additional secretarial and supporting staff were also included in the approved list of new staff for FY85. 6.11 Allowing for the two who will be away on study leave in 1984-85 this means that there will be an effective staff of twelve senior person- nel available to establish the new Department and initiate its work pro- grams, assuming that recruitment is successful. This will be only barely sufficient for the tasks and responsibilities which are envisaged; it may be noted that the Petroleum Desk in the Bank of Uganda dealing with one aspect of one fuel has nine good quality and experienced staff. It is necessary in these circumstances firstly to compress the Department organization in the first year, and secondly to give some consideration to the likely manpower needs for the future. For this reason, a further six posts have been provisionally identified for FY86, which with the two  - 24 - statisticians returned from overseas study, would give an effective complement of twenty senior staff. It is recommended that, as far as possible, even the administrative/management positions in the Department be filled with personnel with energy-related professional backgrounds. This will enhance the professional capability of the Department as a whole. For example, the head of the Woodfuels and Renewables section of the Department should be a professional with experience both in the production and utilization of fuelwood (para. 6.27). 6.12 Assuming that the two existing sections dealing with electri- city and petroleum remain as they are at present, the highest priority should be given to the recruitment of the top management of the Depart- ment, that is the Commissioner and his Deputy, and to the setting up of the Planning and Central Services Section. This means that for some months, the areas of woodfuels, renewables and energy efficiency would be covered on a more limited basis than would be ideally desirable. How- ever, the Forestry Department has its own ongoing programs as have the Ministries of Industry and Transport with their energy audits and effi- ciency studies. The Energy Department's initial involvement should be concentrated on following the progress of these activities, on developing improwed liaison with the agencies concerned, and with establishing an appropriate data base and information system for monitoring their acti- vities and integrating them into the general energy planning process in the longer term. 6.13 The two following diagrams indicate how the Energy Department would look in the first and second stages of development.  - 25 - Fi8.: 2 UGANDA Energy Depiment I ab It . Pewnanen~ewpic LI~~~~~~~IE4 ~ ~ ~ m I . q _ ~~~~~~De MM onc IConw~~~~~~~~~I I~~~~~~ia(OUCrmnIs (OtherNGA) Elecmdt PehobumM Canthn Wood h9 s i .nlor _ Asistant ASScnt Assdadt ~~~~~~~~~~~~~~~~eir lc ncl st I~~~~~~~~~~~~~~~~efrtfsls CoEnIgIInAder Wcdd Bank8-26719  - 26 - Fig.: 3 UGANDA Energ Depoatment Second Staog Milsteru Pemf nent Iconsuctlve IPtf:em . P4p~n C;ommisslonef mpprWod Bok-272 En __ MPED Ad _ . MF L _ ~~~~De"u MAF BOIJ/PD (UEB) (01 Crpns) (OthrNGA) I .II - I AsWalso Asant AWOnt| to Assistant IIVww Ecoom Seror totWklan EcrthW - Ec:IoFs StotisHcian EconanXt | | Ewwr,W(2) | | Ecorst As| st SeaetarV| l Asst. Secretary Ass. Se elr | EbctwlV Joint |w | E nev Wos | od Fuel | Consu 1 |e Petroleumn | Advi y D&Ao t) Cownci --Comminee Board co ! Cann WaW Bank-26720  - 27 - Relationships with Other Bodies 6.14 The general responsibilities which have been given to the Energy Department are comprehensive so far as policy recommendation, planning, and the overall coordination and administration of the energy sector are concerned, but they have not been clearly defined in terms of specific tasks and procedures which will have to be followed. In parti- cular, as we have seen, the energy sector will require a number of new administrative arrangements and mechanisms to ensure its effective inte- gration and coordination. It will also require a strengthening of exist- ing procedures whether these are specified in legislation, as in the case of the electricity industry, or have developed informally. 6.15 The first level of coordination to be established is between the Energy Department and the central economic Ministries of Finance and Planning and Economic Development. Here the need is to ensure that energy plans and policies are conceived and formulated within the general framework of national budgets and development programs. Also, it must be ensured that these programs are formulated with due regard to the interests of the energy sector and the constraints which energy avelability may impose on the economy as a whole. Planning and appraisal procedures. (such as the use of common discount rates and depreciation provisions), and standardized data systems should be jointly agreed by regular consultation and supplemented where necessary by small technical working groups. The Department should also be involved in all official discussions on budgetary and planning matters where energy interests are likely to be affected. The principal mechanism for ensuring this consultation on a continuing basis will be in the work of the Energy Policy Committee and its secretariat. 6.16 The second level of coordination, the one in which the Department has the lead role, is that involving the other subsector agencies and institutions in the energy sector. Here too, the Energy Policy Committee will provide the main general coordination forum, but it will need to be supplemented by various bilateral arrangements appro- priate to each subsector. 6.17 In the case of electricity and the UEB, the Electricity Act specifies the respective responsibilities of the Board and the Minister to a) appoint the Board; b) give general or specific directions; and c) call for information as required. Day-to-day working relations between the Board and the Ministry are good, but limited. In the energy planning context, it has already been suggested that the Board should be required to prepare an annual progress report on its own development plans for consultation with the Energy Department and approval by the Minister. It.has also been recommended that the Electricity Consultative Council should be re-established and the Energy Department should be represented on this either by the Commissioner or his Deputy.  - 28 - 6.18 In institutional terms the petroleum subsector consists of the Uganda operations of the six multinational oil companies and the PetroLeum Desk in the Bank of Uganda. He.*e, the linkages are complex because they involve both public and private sector institutions as well as national and international considerations. However, there are two simplifying factors: first, in their dealings with the Government, the six companies act together to a large extent and second, three of the companies in their Uganda operations have a 50X Government shareholding and up to half the members of their Boards of Directors are Government nominees. 6.19 Although the MPPT has certain regulatory and licensing func- tions under the Petroleum Act, the main official link with the oil com- panies since 1982 has been through the Petroleum Desk of the Bank of Uganda and these were strengthened following the ESMAP technical assistance mission of Mr. Turgut Ogmen. The Bank of Uganda's primary interest in the petroleum sector has been in the provision and allocation of foreign exchanie for the purchase of petroleum products but it has also been concerned with ensuring the most advantageous sources of supply and also with ensuring that the quantities of petroleum products which were paid for actually reached the country. The Bank thus became concerned not only with the financial aspects of oil supply, but also with the physical movement of products. 6.20 Working relations between the Petroleum Section of MPPT and the Petroleum Desk are good, but are not very clearly defined. The foreign exchange transactions are the responsibility of the Bank of Uganda and subject to the overall macroeconomic considerations which involve the Ministry of Finance and the Ministry of rianning and Economic Develop- ment. When the Energy Department is fulLy operational the needs. of energy policy will have to be taken into account as well. On the other hand, administrative matters related to the internal distribution of supplies is the responsibility of the MPPT which has been involved in a) preparation of a petroleum product distribution plan; b) liaison with the network of District Fuel Control Committees; c) licensing of filling stations and kerosene agents; d) collection of petroleum import data and consumption trends; and e) keeping track of market trends, prices, and fuel saving. Up to now, because of staff limitations, the MPPT has not been able to exercise all these functions effectively and, with its greater resources, the Bank of Uganda has to some extent moved in to filL the vacuum. 6.21 The government has decided that the Petroleum Desk is responsible for providing essential data and analysis pertaining to oil supplies to assist the Energy Department in preparing policy recommenda- tions for consideration at the Ministerial/Cabinet level. There still remains a grey 4rea which exists between the clear executive role of che Bank of Uganda in dealing with foreign exchange questions and the MPPT's administrative an, executive role with respect to internal distribution and the requirements of the petroleum legislation. The Energy Department being responsible for the coordination of policy in r~espect of all energy  - 29 - forms and their efficient use is, in principle, the leading agency, but it will for some time have limited resources. The Bank of Uganda's Petroleum Desk has greater resources and has made an effective start towards developing good contacts with the companies and setting up a monitoring and reporting system. In general, the rule should be that all data and decisions regarding the physical movement of crude and petroleum products destined for Uganda's use and its distribution and consumption within the country should be handled by the MPPT while matters involved with the expenditure of foreign exchange and oil procurement should be dealt with by the Bank of Uganda. Matters relating to refining of crude oil would primarily be matters for the Energy Department, but oil pricing in its internal aspects would be dealt with (as it is at present) by the Ministry of Finance in co.nnultation with the Energy Department and the Bank of Uganda. 6.22 Because of these combined responsibilities for the petroleum sector, it is recommended that the relationship between the interested agencies should be formalized and that for this purpose a Joint Petroleum Committee should be set up. The Committee should meet two or three times each month under the chairmanship of the Deputy Energy Commissioner with two or three members from the Petroleum and Planning Sections of the Energy Department, a similar number from the Petroleum Desk and a repre- sentative from the Ministry of Finance. The function of the Committee would be to coordinate the interests and activities of the participants on all petroleum matters and also be responsible for compiling and draft- ing the monthly Oil Situation Report on an up-to-date and regular basis for submission to the Energy Policy Committee, the management of the Bank of Uganda and others with interests in the petroleum sector. Although planning in the petroleum sector will necessarily be less formal than in the case of electricity the need for forward assessments of resources and demand will be no less important in the national planning context and the Committee will need to play an important part in coordinating this work. 6.23 The role of the Government nominees on the boards of the three part-owned oil companies should also be considered in the energy policy context. At present, they are appointed by the President. It is desir- able that the Board members who are appointed should be aware o' the Government's energy policy interests and they should therefore be tept briefed on relevant policy background and decisions. One way of achieving this would be for the Government to appoint senior staff of the Energy Department to some of the positions reserved for Government nominees on the boards of the oil companies. 6.24 There is a further aspect of the petrpleum sector in which the Energy Department will need to establish a regular interest, namely the progress of petroleum exploration activities which are the operational responsibility of the Ministry of Lands, Minerals, and Water Resources. Initially, the Department will need to do no more than keep a watching brief in this area, but capital expenditures in the energy sector are involved and they will need to be considered alongside expenditures and the allocation of resources in other areas. Already, some progress has  - 30 - been made in establishing a code and a model exploration/production agreement with the assistance of the Commonwealth Fund for Technical Cooperation with World Bank participation. Should the initial explora- tion be successful, decisions will need to be taken on further drilling, appraisal and possibly production. This could lead in a few years to important decisions being needed on downstream activities such as refining and distribution which would involve a heavy commitment of resources. For the present, however, no special consultative arrangements are required, although the MLWR should be a member of the Energy Policy Committee. 6.25 Research activities principaily involve the National Research Council and it is recommended that a senior member of the Energy Depart- ment should be appointed to the Council. In addition, one of the profes- sional staff in the Department should be given the task of academic liaison and be responsible for keeping in touch with energy research and related activities at Makerere University and other research institutions in East Africa. Two major weaknesses have already been identified in the research field. The first is that because of Uganda's recent history, many of the international contacts with other research and academic bodies were severely curtailed and researchers have not kept abreast of work being done elsewhere. As a result, much of the research being done in the country is at a relatively low level and simply duplicates what has already been done in existing studies. The second weakness is that in some areas research is not carried through to the level of demonstra- tion projects with a view to getting its results adopted and applied. Both of these are issues to which the Science and Industrial Research Committee of the National Research Council should address itself. 6.26 . It is also noteworthy that the emphasis of energy related research has been in the technological aspects of renewable energy sources, woodfuels and charcoal, and solar and biomass. There has been little or no investigation into the economic and sociological aspects of energy supply and use in Uganda conditions. Some of the themes which merit investigation by the social scientists were mentioned above (see para. 4.19), and it will be for the Energy Department to prepare an annual energy research program which would draw the attention of the Social Science faculty at Makerere University to these gaps in knowledge and if necessary specify and sponsor particular projects which require investigation. 6.27 In the woodfuels sector, the first requirements will be for the responsible desk officers in the Energy Department to establish close and regular working contacts with the *senior officials of the Forestry Department in Entebbe and to work out with them improved data, reporting and monitorihg systems. These systems should include production, stocks, and marketing data, distinguishing fuel from other timber uses, as well as a framework for keeping the progress of development projects under review. The Energy Department's staff in this subsector will initially be limited and inexperienced, and consideration should be given to the secondment of a Forestry Officer to the Department on a full-time basis,  - 31 - or if this should not be possible, to designate an officer in the Forestry Department to deal exclusively with the fuel and energy policy aspects of his industry. If possible, the head of the Woodfuels and Renewables Section should be a professional with experience in both the production and utilization of fuelwood. The Energy Department is also likely to require a number of special studies and surveys in the use of woodfuels and for this purpose additional resources should be sought through the Forestry Department at Makerere University and by the use of vacation students. The Forestry Department of the Ministry of Agriculture and Forestry will, of course, be represented on the Energy Policy Committee, but links could be further developed by establishing a Woodfuel Development Committee to meet quarterly and with members drawn from the Energy and Forestry Departments, the Forestry Research Department, charcoal traders, privite industry, and Makerere University. The task of the Committee would be, in the context of the national energy-planning process: a) to keep the gener4l. conditions of woodfuel supply and use under review; b) to consider the opportunities for technological innovation in the use of woodfuels; c) to consider the situations in which fuel substitution towards or away from fuelwood are appropriate; d) to review fuelwood and charcoal use and research within and outside Uganda in the light of its possible relevance to the country; and e) to sponsor studies, demonstration projects, publicity, and other appropriate activities to encourage public awareness of the value of wood as a fuel. The private sector of the economy will have an important role to play in the orderly development of charcoal production and marketing and the activities of rural industries in encouraging the efficient use of all woodfuels will need to be the subject of interdepartmental coordination. It is also recommended that these activities should be strengthened by the appointment, under short-term technical assistance arrangements, of a Woodfuels Adviser-working with the Energy an; Forestry Departments to coordinate and direct the activities suggested above. 6.28 Energy policy often tends to be dominated by supply considera- tions and producers' interest, and it was for this reason that it was suggested above (para. 6.7) that an Energy Users Advisory Committee should be set up to ensure that the diverse and varied but vital consumer interests are given some means of expression. The Committee, which should have no more than about a dozen members, would be "sponsored" by the Efficiency Section of the Department and would provide its secre- tariat. It should function and be seen as an independent body represent- ing a wide range of consumer interests: domestic, industrial, rural, urban, and community welfare. It would concern itself with general questions of the supply and availability of fuels, and also with prices, safety, and appliance efficiency. It would also play an important part in stimulating activities and interest in the creation and implementation of a national energy efficiency program. Its relationship with the Energy Department would be two-way: it would represent consumer interests to the Government, and provide a channel for the transmission of Government policies on efficiency and other aspects of energy utilization to consumers.  - 32 - VIIo STATISTICS AND IWIOMATIOI SYSTES 7.1 The Energy Department requires a comprehensive system of energy statistics in order to carry out its policy formulation and planning functions. The system must be internally consistent and compatible with other data on the national economy. It has to cover in a timely and accurate way all the processes of energy supply, production, conversion and utilization, and for the implementation of effective energy manage- ment and efficiency programs it needs to include information about what energy is used for -- i.e., whether for heating, lighting, or motive power. It must also relate the energy sector to the rest of the national economy. 7.2 The establishment and development of this system will be the responsibility of the Senior Statistician in the Central Services Section of the Department supported by the statisticians in the three specialist sections. 7.3 There are many gaps in the coverage and continuity of the existing fuel supply statistics which will need to be filled by reviewing existing sources, records, and reporting procedures. However, it is in the area of energy demand, consumption and utilization that the greatest amount of new primary data collection, assembly and processing will be required. At present, only limited information is available from sales figures provided by the electricity and petroleum industries on energy consumption in the main sectors of the economy and considerable expansion is needed in this area for general demand analysis, forecasting and work on energy efficiency. 7.4 The Department's statisticians will need to work closely with the Ministry of Planning and Economic Development and especially with the Statistics Department to ensure comparability and compatibility with other national statistics and also to ensure that maximum use is made of other statistical work, for example, in household surveys and production census, to obtain information about the energy sector. 7.5 Before embarking on a major program of statistical work, it will be important to lay down a number of ground rules regarding the basic concepts in energy statistics (e.g., primary fuels, delivered energy, and consumed energy), definitions, units of measurement, con- version factors, and forms of presentation in line with national and international practices and conventions. This work will require tech- nical assistance support by an Energy Statistics Advisor. 1.6 The basic minimum requirements of the statistical system are: (a) Time Series showing the production and use of all energy commodities (electricity, petroleum products, fuelwood, char- coal and other biomass) on an annual, quarterly, and monthly basis. Seasonally adjusted series should also be available;  - 33 - (b) Price Statistics of all fuels (including crude oil) in various markets, movements .n relative fuel prices and in energy prices as a whole; (c) Energy Commodity Balances which are supply and use accounts for each separate form of energy expressed in "`.atural" units (i.e., kWh, tons, liters or gallons) and in "energy" units (BTU, calories, or Joules); (d) An overall Energy Balance showing the same information, but expressed in a common accounting unit (e.g., tons of oil equi- valent or a selected energy unit). These balances should cover production, imports, stock changes, intermediate uses, and final consumption by sectors; (e) International Trade in all energy products showing quantities, prices, and unit values; (f) Manpower employed in the major energy related industries; (g) Market Shares of individual fuels; (h) Consumption data will initially be fragmentary but should be collected from large zonsumers (e.g., railways) and estimated from sales data. 7.7 In addition to collecting, processing, and maintaining the statistical data base for internal use, special attention must be paid to its presentation and dissemination. Summaries should be prepared for regular submission to the Energy Policy Committee (in collaboration with the Bank of Uganda's monthly oil reporting system) and a regular quar- terly energy statistical bulletin should be prepared to coincide with the quarterly meetings of the expanded EPC. Library 7.8 The information system of the Energy Department should include a library of relevant books, journals, reports, and current publications covering all aspects of basic energy technology, energy data, and anal- ysis, including forecasting and modelling techniques, local documents concerned with energy matters (including all background and current legislation), publications of international agencies and a number of periodicals dealing with particular aspects of world energy trends and developments. To be an effective aid to policy and planning, the library should be secure, well maintained and accessible, and responsibility for it should be among the duties of a single designated officer in the Department. The selection of material would be the responsibility of the Energy Adviser and the cost should be met from the TA budget.  - 34 - Computerization 7.9 As will be evident from the earlier consideration of the sta- tistical situation and the Department's needs, the first priority must be given to the collection and processing of primary data from the main sources of energy supply, to improving the flow of information on energy utilization and to assembling it in forms which will be of maximum use in analysis, policy formulation, and planning. The statisticians and econo- mists concerned in this work must be confident in the quality of the data and have a full understanding of the bases of measurement and collection. Initially, therefore, the emphasis will need to be on familiarization with data sources and definitions and with the manual manipulation of the statistics. 7.10 Looking further ahead, however, there is no doubt that the application of computer technology in the energy sector could be of con- siderable value in data storage and retrieval, in the preparatioa of standardized tables and energy balances, and in energy modelling and, forecasting work. It will also be necessary to train staff in the use of these techniques, and for this reason it is recommended that the Depart- ment should acquire a small in-house computer system which could be used for training purposes, in parallel with the manual compilation of the data base, until such time as the basic information system has been developed and the analytical needs are more precisely defined. 7.11 There is currently available a very wide range of systems, at reasonable cost, which would have the capacity to perform all the func- tions which are likely to be required in Uganda's energy sector over the next five to ten years. The system chosen should be simple to operate, robust, versatile and be ane for which good back-up and maintenance facilities are available. It is suggested that a package based on the IBM Personal Computer (or an equivalent system) with associated hardware and software facilities would be the most appropriate. 7.12 The system would consist of: Hardware TBPMR1T System Unit (or equivalent) with up to 512k RAM with 10mb hard disc drive and 360k floppy disc drive, keyboard, monochrome display, and printer COST: about US$10,000 Software EasyWriter (for word processing) Multiplan (for modelling and forecasting) Lotus 1-2-3 or, as an alternative VisiCalc (general calculations with memory and display capability) dBaseII (for data storage and manipulation) COST: about US$3,000  - 35 - Ancillaries Voltage regulator, stands, cables, discs, paper, ribbons, books, training manuals, etc. COST: about US$2,000 Such a system is easily expandable to increase its capacity and incor- porate graphics and color displays. The total foreign exchange required for the system would not exceed about US$15,000. The precise configuration to be adopted and the timing of the purchases would be matters to be decided by the Statistical Adviser and the Energy Adviser as manager of the TA Program.  - 36 - VIII. TRAINING 8.1 The Energy Department will need to establish itself at an early stage as the centre within the Covernment of authority and expertise in energy matters. Since energy is a complex and multidisciplinary field of work, with a high technological content, it will be necessary to imple- ment a systematic training program, especially for the new staff. The program will range from the day-to-day gaining of experience on-the-job to attendance at formal courses of training both in Uganda and over- seas. As always, a balance has to be struck between the short- and long- term needs of the public service and the career development of the indi- vidual officers concerned. 8.2 All staff in the Department should be expected to acquire on- the-job understanding of the basic technology of the energy-related industries with which they have to deal and to supplement it with private study. In electricity, this means a certain amount of basic physics, the principles of electricity generation and transmission, the physical and engineering characteristics of electrical equipment, and the units of measurement which are used. In the petroleum subsector, this involves understanding of the exploration and production process, oilfield manage- ment and depletion problems, the chemistry and economics of -refinipg operations, and the problems of transport and distribution as well as the energy characteristics of individual petroleum produces. For fuelwood, it will require a knowledge of the energy characteristics of various timbers and their uses, their life cycles, and the pattern of supply in Uganda. In renewable fuels the principles of solar radiation, the design of collectors and biogas appliances should be understood. In the field of energy efficiency, staff should be able to identify potential sources of savings and their relative magnitude. In addition, staff should be familiar with the insulating properties of materials, the measurement of appliance efficiency and concepts of useful heat, and general principles of thermodynamics. 8.3 This kind of basic knowledge and familiarization with the energy system would mainly be gained by work experience and the counter- part relationships with the TA advisers, but it should be supplemented by making use of the facilities provided by such bodies as the UEB, the oil comianies, the Forestry Department, and Makerere University science departments. 8.4 The Institute of Statistics and Applied Economics at the Uni- versity operates on an all-Africa basis (with special emphasis on the countries of Eastern and Central Africa) and is funded by UUDP. It also has close links with the UN Economic Commission for Africa and with the UN Environmental Program in Nairobi. In addition to running regular degree and diploma courses, the Institute has a program of local, sub- regional, and regional seminars. One such seminar is provisionally scheduled for September 1985 on the subject of statistical systems for efiergy and the environment, but it was suggested by the Institute's  - 37 - Director that it might be brought forward to the early part of the year and its scope modified to cover both energy economics and statistics. It is recommended that this possibility should be actively followed up by the Energy Department and that visiting lecturers should be provided from technical assistance funds to strengthen the content of the seminar. 8.5 Lf the proposals for long- and short-term technical assistance which are suggested in this Review are adopted, then this would provide further resources for staff training in the Department both through the normal processes of the counterpart relationships and also by more formal internal training and lectures. 8.6 In view of the importance of the petroleum subsector in Uganda's energy economy and the technical and economic complexity of the international oil industry, it is recommended that after the Department has been established for about a year, one of the senior members of its staff, possibly the Deputy Commissioner or the Senior Economist, should be sent on an intensive petroleum management course, of which a number are offered by international agencies as well as by some of the major international private consultancy firms. 8.7 Efforts should be made to enable suitably qualified members of the Energy Department to attend regional and international conferences on energy matters from time to time, especially if active participation through the submission of papers can be arranged. Uganda should also endeavour to be represented, probably by the Energy Commissioner, at the next World Energy Conference which is due to be held in 1986.  - 38 ^ IB. TECUNICAL ASSISTANCE 9.1 The setting up of the Energy Department and the implementation of its work program over the first two or three years will require a sub- stantial back-up of technical assistance support to assist in strengthen- ing the new institutional arrangements and enhance the general expertise of the energy sector. These requirements are summarized below, and more detailed terms of reference are set out in Annex 2. With the exception of the Energy Adviser who should be in post for the whole of the two-year period of assignment, it is suggested that the other short-term advisers should each pay a number of visits to Uganda to initiate work programs, review progress and make a long-term contribution to the training work in their fields. 9.2 Energy Adviser. A long-term Energy Adviser for a period of about two years was recommended in the 1983 Energy Assessment. This pro- posal is strongly endorsed as a means of strengthening the overatl coor- dination of energy policy. It is important, however, that at least one of the senior posts in the Department should be filled before the Adviser arrives so that effective counterpart relationships can be established. The Adviser would be responsible for assisting in the consolidation of the Department's role within the Government, for developing links with other official and unofficial bodies, advising on the interpretation of trends and the formulation of policies, identifying gaps in the informa- tion system and initiating the necessary survey and other work to fill them, and ensuring adequate liaison with all other energy related tech- nical assistance activities in Uganda. The Energy Adviser will also fulfill the role of manager of the Technical Assistance Program. 9.3 Statistical Adviser. It is recommended that a well qualified Energy Statistical Adviser should be made available for a total period of about four months over the two-year period to review the existing electricity, petroleum and woodfuel statistics and advise on the best means of adopting them to meet Uganda's energy planning needs. He should advise on the establishment of standardized data reporting, collection and presentational procedures (including time series and energy balances) and on the general development of the Department's statistical system in line with international practices and conventions. He would also ensure consistency with other statistical systems ir. use in Ugangda and assist in training local staff and in the preparation of publications and reports. 9.4 Petroleum Sector. In the recommendations of the World Bank Mission. on petroleum import arrangements which was carried out by Mr. Turgut Ogmen in 1983, proposals were made for three short-term technical assistance posts of about three or four months to deal with petroleum supplies, pricing, and forecasting. The phasing of their visits should be adopted to the Department's work program. While the three experts will be formally assigned to the Department, the Supplies Expert will be expected to work closely with the Petroleum Desk of the  - 39 - Bank of Uganda, the Pricing Expert with the Ministry of Finance, and the Forecasting Expert will work with the Petroleum Section of the Energy Department and with the Planning and Central Services section. The coordination of this work will be assisted by the establishment of the Joint Petroleum Committee which has been proposed. The experts will be expected to take part in the work of this Committee. 9.5 Woodfuels Adviser. It is recommended that a Woodfuels Adviser should be appointed for a total period of three or four months to assist and advise on the work program of the Department's woodfuels section and to assist in its liaison with the Forestry Department. 9.6 Energy Efficiency. It is recommended that an Energy Efficiency and Conservation Expert should be appointed for a period of about four months to assist the Efficiency Section in developing its work program and coordinating all existing studies being carried out by other agencies in industry and elsewhere. The advisor should assist in setting up systems for monitoring the progress of energy efficiency measures in their technical and economic aspects and help to train counterpart staff in carrying out a continuing work program in all sectors. 9.7 Training. The precise training and staff development program will need to be worked out in the field by the TA advisers and the management of the Department. An allowance of $100,000 has been included in the program to cover this, and which has been based on ten overseas management courses at a cost of $10,000 ea-h. If appropriate, these could be replaced in part by regional arrangements. A sum of $20,000 has also been allowed to provide overseas experts and specialists to pay short visits to Uganda to participate in local training seminars. In preparing the detailed training program, there would be a need to coordinate the visits of the specialist/advisers with the availability of counterpart local staff. For this reason, it would be advisable to extend some of the training beyond the two-year work program. 9.8 The above specialists should be recruited after: (a) the Energy Adviser is in place; (b) local counterpart staff for each of them have been appointed; (c) the specific TORs and work program of each specialist has been prepared in consultation with the Energy Adviser and cleared with the Government; and (d) logistical support (office, secretarial facilities, transport, etc.) has been arranged. 9.9 The approximate total cost of this technical assistance pack- age, including provision for training and equipment, is provisionally estimated to be about US$670,000 and is made up as follows (for details of phasing see Table on p.41).  - 40 - Technical Assistance Advisers 2/ US$ Energy Adviser and Manager TA Program 24 months 250,000 Statistics Adviser 4 months 40,000 Petroleum Supplies Adviser 4 months } Petroleum Pricing Adviser 4 months } 144,000 Petroleum Economist 4 months } Woodfuels Adviser 4 months 40,000 Efficiency Adviser 4 months 40,000 514,000 Training Short specialist courses 100,000 Seminar lecturers 20,000 120,000 Equipment Mini-Computer package (incl. maintenance) 20,000 Office equipment, library, etc, 16,000 GRAND TOTAL 670,000 2/ In engaging specialist advisors, advantage should be taken of the availability of specialists with multi-disciplinary skills to reduce overall costs. In particular, it may be possible to find a specialist competent to handle the work of the petroleum economist and the oil pricing specialist.  Table 9.1: TECHNICAL ASSISTANCE PROGRAM Beyond the Year I Year 2 first Total Quarter 1 Qu..; Fr 2 Quarter 3 Quarter 4 Quarteo. I Quarter 2 Quarter 3 Quarter 4 2 Years man-months AdJ i ers l:nergy Adviser 24 bIdtibtics Adviser 4 | | I 1 | 4 relroleuau Supplies Adviser - | -| I-I 4 Vetroleum Pricing Adviser - j j 4 -etroleum Economist - l - |-| 4 4- Woodfuels Adviser 4 i 1 * Efficiency Advlher | |-| - |-_ 4 Lxpenditure (US$000) US$000 Energy Adviser 20 30 30 30 30 30 30 30 20 250 Statistics Adviser 10 10 10 10 40 Petroleum Supplies Adviser 12 12 12 12 48 Petroleum Pricing Adviser 12 12 12 12 48 14iutroleum Economist 12 12 12 12 48 W,Kudfuels Adviser 10 10 10 10 40 i ticiency Adviser 10 10 10 tO 40 I quipItttet 11 20 5 36 rdilning tO to 10 10 10 10 60 120 lUtdl 53 126 57 84 62 72 86 50 80 678  - 42 - X. WORK PROCRAM 1001 The initial work program suggested in this chapter is tentative and is dependent on the success of the program of recruitment and on the quality and expertise of the staff. It will also depend on how quickly the recommended technical assistance support can be assembled and on when the Department becomes fully operational with its senicr management staff in post. It is hoped that this can be sufficiently achieved in early 1985 so that the new coordinating and institutional arrangements, and especially the Energy Policy Committee, can begin their work as soon as possible. 10.2 In order to plan the TA program and identify certain management and operational targets for the Department, a two year (eight quarter) timetable has been set out in the chart on page 40 showing the periods during which the assignments of the various advisers should be sched- uled. It is set to begin whenever the TA funds have been approved. It will be preceded by a period of preparation running from the present until the full program can begin to be implemvnted. During this preliminiary stage the local staffing, accommodation and administrative arrangements should be completed. The paragraphs below set out the general working objectives to be pursued in this preparato':y period which will run forward into the two-year program. It is envisaged that minor mid-course corrections will need to be made in the program in aspects such as the type and duration of specialist support engaged. However, such alternations should not result in deviation from the goal of establishing an appropriately staffed and adequately trained Department by the end of the two-year program. Alterations would be based on the progress achieved and the need for concentrating on especially weak areas and would be recommended jointly by the Energy Commissioner and the Energy Advisor and reviewed by the financing agency. 10.3 Recruitment, Accommodation, and Administration. The recruit- ment procedures have already been started and should be pressed ahead urgently with special priority being given to obtaining the Commissioner, the Senior Economist, the Senior Statistician and the Principal Assistant Secretary. It would be desirable for these to be appointed and be in post in early 1985 to undertake the necessary preparatory work involved in establishing the Department, initiating work on the data base and information system, and preparing for the first meetings of the EPC. 10.4 Office accommodation has already been designated and the neces- sary office equipment such as typewriter, telephones, photocopier and two or three good calculating machines are required. At least some of this equipment should be provided as part of the TA program. One of the rooms should be designated and furnished as a library/committee room. 10.5 The Energy Department will need to establish its own internal administrative procedures and filing systems, and its working  - 43 - relationships with the rest of the MPPT which will continue to have overall financial and management responsibility. 10.6 Planning and Central Services Section. The day-to-day work of this Section will be directed by the Dieputy Energy Commissioner assisted by the Energy Advisor when he arrives. Their first task will be to ensure that the staff have the necessary resources to be able to provide general energy briefing and advice to senior officials and the Minister, drawing on the resources of the other Sections. They should carry out a quick overview of the energy sector of the economy, drawing on and updat- ing existing information and studies such as the 1983 Energy Assessment and the 1984 Status Report prepared by the World Bank. This should even- tually form the basis of the Department's first reports to the Energy Policy Committee, and the first step towards the preparation of a prelim- inary energy planning document to be completed by the end of the first year of operations. This would set out the role of energy planning in the overall national planning process and provide an outline statement of resources and objectives for the energy sector. The economists should review all absolute and relative energy prices with a view to establishing tue basis of a rational energy pricing policy. The statisticians should begin work, with the assistance of the Statistical Advisor, on the consolidation of existing energy statistics and the preparation of fuel and energy balances, and on plans for regular quarterly.bulletins of energy statistics. The Section will in due course. be responsible for the Departmental library and for management and supervision of the computer facilities and their use. It will establish close Liaison with the MPED and the Ministry of Finance to ensure that energy matters are given full weight in all budgeta-y and planning activities. In the first two or three months, the Commissioner and his Deputy should have established agreed working relationships with all the energy related agencies and institutions. 10.7 Electricity Section. The Section will continue its ongoing work and relationships with the UEB and will also work with the Planning Section on all the electricity aspects of their work program, including statistics, prices and general planning. Preliminary discussions should be held with the UEB regarding the reconstruction of the Electricity Consultative Council and the strengthening of the Board's own planning arrangements. 10.8 Petroleum Section. Routine monitoring and administrative work connected with the internal distribution of petroleum supplies will con- tinue as at present. A review of the work and contribution of the District Fuel Committees should be undertaken. The existing links with the oil companies, the Petroleum Desk, and the Ministry of Finance on petroleum matters will continue and when the Advisers are in post arrangements should be made for formalizing them by setting up the Joint Petroleum Committee. A review of petroleum price trends should be under- caken as part of the general review of energy prices being carried out by the Planning Section. The timing of other planning work on petroleum stacistics. prices and the general economics of the petroleum sector will  - 44 - depend on the timing of the arrival of the technical assistance experts, but one priority task will be to prepare forward demand projections to assist the Bank in estimating future foreign exchange requirements. Liaison arrangements with the Geological Survey (MLWR) should be estab- lished on the petroleum exploration program and the legislation to be associated with it. 10.9 Efficiency, Woodfuels, and Renewables Section. This group will function as a single section for the first year until the recruitment of additional staff enables two viable sections to be established. As a new section within the Department the first tasks will be to review all existing policies, projects, and development programs being carried out by the other agencies (Ministries of Industry, Transport, Forestry Department, and Makerere University) and become familiar with their infcrmation systems and working procedures. On the basis of this, an outline for a nscional energy efficiency program should be prepared for early presentation to the EPC. The statistical coverage of the woodfuel industry should be reviewed with the Planning Section's statisticians so that it may be incorporated into the general system of energy statis- tics. The head of this section (it is suggested that this initially be the Principal Assistant Secretary) will, in addition to coordinating this work, be responsible for administrative matters relating to the EPC, i.e., convening its meetings, preparing agendas and ensuring prop3r documentation. 10.10 Training. Because of the absence of two members of the Depart- ment on overseas study leave in the first year, the initial training and staff development program will have to concentrate on local activities such as short-term courses within the region or in the fuel industries or rely on on-the-job experience. The UEB and the oil companies should be asked to assist in this, and the Institute of Statistics at Makerere University should be asked to arrange the regional economics and statistics seminar on energy (see para 8.4) and also to assist in a computer training program. 10.11 Although there is uncertainty about the timing of many of the important elements in the Department's program, there ire certain broad targets which can be identified and recommended as d ;t to managment. The priority for the first few months is to est ..,sh .he Department's organization and administrative arrangements. See- ., the review and reorganization of the statistics system will t id tO be started as well as a program of in-house analyses of energy derind, supply projection and price trends. Third, the new coordinating committees for energy policy, petroleum and energy utilization will need to be set up. These and other objectives are summarized in the timetable below.  - 45 - Lnergy Department: Output and Activity Objectives: Preparatory Period In the period leading up to the implementation of the TA pro- gram and the full operation of the Department the following actions are required: (a) Recruit all new local staff for first stage as provided for in the 1984-85 Budget; ' (b) Provide office accommodation, basic furniture and equipment; (c) Implement Departmental organization and reporting procedures; (d) Initiate work program as specified in paragraphs 10.3-10.10 including preparation for main committees (EPC and JPC); (e) Obtain approval for TA funds; (f) Prepare TOR and work programs for TA advisers. During the next two years the following actions would be required: Year I First Quarter (a) Establish the modus operandi of EPC as soon as possible after arrival of Energy Adviser; (b) Establish JPC with main task to speed up production of monthly o*il reports; (c) Begin formal discussions with UEB on reconstitution of Electricity Consultative Council; (d) Commence reorganization of statistical system when adviser arrives. Second Quarter (a) Review efficiency and conservation program with Efficiency Adviser; (b) Prepare constitution of Energy Uses Advisory Committee; (c) Begin publication of monthly oil reports; (d) Produce first issue of quarterly statistics bulletin;  - 46 - (e) EPC to consider joint paper from Energy and Forestry Departments on woodfuels situation. (f) Prepare Departmental staff development program including computer training. Third Quarter (a) JPC to produce report for EPC on petroleum situation and outlook with views of Petroleum Advisers; (b) Commissioner to prepare report for Ministers on first six months of Department's work; (c) Prepare draft energy efficiency and conservation program; Cd) First meeting of Electricity Consultative Council; Ce) UEB prepares electricity planning paper for submission to EPC. Fourth Quarter (a) Prepare paper on energy planning and planning work program for Year 2; (b) Begin computerization of data base, energy balances, etc; (c) Paper for EPC on energy pricing strategy. Year 2 First Quarter Reorganize woodfuels and efficiency work to two separate sections, and set up Woodfuels Development Committee. Report to Ministers on first year's activities. Secopd Quarter Review staffing and organization of Department and progress of institutions. Third Quarter Begin draft of the national energy plan. Fourth Quarter Complete draft of the energy plan.  -47- Annex 1 Page 1 of 2 LIST OF PERSONS AND INSTITUTIONS CONSULTED Ministry of Power, Posts, and Telecommunications Mr, L.O.J. Kerujik Permanent Secretary Mr. J. Kyalimpa Under Secretary Mr. A.T. Bagarukira Senior Assistant Secretary Mrs. D. Kawesi Senior Assistant Secretary Mr. S. Sakwa Statistician Mr. C.E. Baziga Statistician Mr. K.F. Tagume Economist Ministry of Planning and Economic Development Mr. J. Ntorontyo Chief of Industries Section Mr. Kayiso Acting Chief Government Statistician Ministry of Agriculture and Forestry Mr. E.D. Olet Deputy Chief Forest Officer Ministry of Finance Mr. Tibihikirra Commissioner for Management Mr. D. Thomson Budget Advisor Ministry for Industry Mrs. J. Mambuli Acting Senior Industrial Officer Bank of Uganda Mr. 8. Vollan Director of Research Mr. V.E. Eduku Sr. Principal Banking Officer (Oil Desk) Uganda Electricity Board Mr. A. Lugangira Deputy Chairman/MD Uganda Railways Corporation Mr. J. Mulondo Chief Operations Manager  -48- Annex 1 Page 2 of 2 Forest Research Centre Mr. Bayarugaba Regional Forest Officer Mr. J. Carvalho Sr. Utilization Officer Mr. M.O. Olaya Principal Research Officer National Research Council Mr. Ovon Chief Research Coordinator Prof. Ilukor Member Science & Industrial Committee Makerere University Prof. S. Tulya Mulhika Director Inst. of Statistics and Applied Economics (UNDP) Prof. D.E. Pomeroy Zoology Dept. (Environmental Studies) (UNESCO) Prof. Lugojjo Dean, Faculty of Technology Shell (Uganda) Ltd. Mr. Ingmar Hellman Managing Director UNDP Mr. T. Howick Smith Ass't Resident Representative World Bank Ms. H. Goris Resident Representative Ms. C. Koenig Administrative Assistant  -49- Annex 2 Page 1 of 6 TECHNICAL ASSISTANCE SUPPORT Draft Terms of Reference The institutional Review has recommended the early appointment of six specialist advisers to assist in the tasks of strengthening and improving the effectiveness of the new Energy Department which has been set up in the Ministry of Power, Posts, and Telecommunications. It was proposed that there shouLd be an: Energy Adviser for about two years; Statistics Adviser } each adviser would Petroleum Supplies Adviser } spend a total of about Petroleum Pricing Adviser } four months in Uganda Petroleum Economist } over the two year Woodfuels Adviser } period of the TA Energy Efficiency Adviser } program. All of these would work within the general program of the Energy Depart- ment, but the Petroleum Supplies and Pricing Experts would be particu- larly required to work closely with and assist respectively the staff of the Petroleum Desk in the Bank of Uganda and the Ministry of Finance. Energy Adviser The Energy Adviser will work with the Energy Commissioner and the Deputy Commissioner to advise and assist them on all aspects of Uganda's energy and associated plans and policies. He will be expected to perform the following principal duties: 1. Assist in the organization of the Energy Department, its inter- nal administration, and its relationships with other institu- tions in the energy sector; 2. Assist in the preparation of a detailed development program for the Energy Department; 3. Manage the Technical Assistance Program; 4. Assist in the establishment and operation of data and informa- tion systems on energy resources and consumption; 5.. Carry out and direct specific studies, as required, in connec- tion with working and performance of the energy economy and in support of policy formulation; 6. Assist in the formulation of a national energy plan;  -50- Annex 2 Page 2 of 6 7. Provide advice and analysis, as required, to senior officials and Ministers, inside and outside the Energy Department, on energy developments and policies; 8. Assist in the coordination and direction of the work of the specialist sections in the Department; 9. Establish close working relations with planners and other offi- cials in all energy related institutions and with other related technical assistance programs; 10. Develop working contacts with energy institutions in neighbor- ing countries; 11. Give advice and assistance, as required, on the appraisal, implementation and monitoring of major energy investment proj- ects; and 12. Participate in the Department's training program. Statistics Adviser The Statistics Adviser will work in the Planning and Central Services Section of the Energy Department to assist in strengthening and developing the energy statistics system and ensuring its consistency and compatability with Uganda's national economic statistics. He will be expected to carry out the following principal duties: 1. Review the existing statistics for all fuels in relation to their accuracy, internal consistency, compatibility with related data, and their timeliness; 2. Advise on data collection procedures, processing of raw data, and forms of presentation; 3. Review the present energy accounting units and make proposals for ensuring standardization and consistency with currently agreed international practice;' 4. Advise the Department's statisticians on methods of aggrega- tion, the maintenance of time series, and the storage and retrieval of data; 5. Advise on the consolidation of data into common units of account by the use of standarized conversion factors; 6. Prepare fuel and energy balances in line with international jtactice and consistent with definitions used elsewhere in the Uganda economy;  Annex 2 -Page 3 of 6 7. Consult and cooperate as necessary and advise statisticians in other Ministries and Departments on matters related to energy statistics; 8. Advise on computer use and prepare programs for tabulation and energy balances; 9. Design formats for regular statistical bulletins and briefing material; and 10. Participate in the training of Department's statisticians. Petroleum Supplies Expert The Petroleum Supplies Specialist will work with the Petroleum Section of the Energy Department and the Bank of Uganda's Petroleum Desk, and in particular tos 1. Advise on all aspects of the supply of petroleum products to Uganda, including crude oil procurement, product imports, refinery options and transportation; 2. Examine, and advise the Bank of Uganda on the technical and logistical means of minimizing foreign exchange expenditure on oil imports; 3. Carry out a study of all available petroleum transport modes and advise on a system for continuous monitoring of costs; 4. Carry out examination of petroleum product mix in Uganda and advise on opportunities for inter-product substitution; 5. Review oil storage facilities and advise on optimal policy for stock levels of petroleum products; 6. Prepire formats for ongoing system of oil supply situation reports for Petroleum and Energy Policy Committees; 7. Advise the Department and the Petroleum Desk on the acquisition and use of oil industry data and publications; 8. Participate in the Department's training programs; and 9. Carry out a study of internal petroLeum distribution and mar- keting arrangements. Petroleum Pricing Expert The Petroleum Pricing Specialist will work with the Petroleum Section of the Energy Department, the Petroleum Desk in the Bank of  -52- Annex 2 Page 4 of 6 Uganda, and particularly closely with those officials concerned with oil pricing in the Ministry of Finance. He will advise on all aspects of petroleum pricing and specifically he will: 1. Advise on the structure of wprld petroleum markets and the determinants of crude oil prices; 2. Advise on refinery costs and operations; 3. Advise on petroleum transportation arrangements and options: tanker markets, pipeline economics, rail and road transport; 4. Examine the structure and determination of retail petroleum prices in Uganda; 5. Review and advise on the taxation of petroleum products; and 6. Review existing petroleum pricing formula and advise on long- term pricing strategy with special reference to optimum supply options, stockholding policy, and oil company margins. Petroleum Economist The Petroleum Economist will work with the Petroleum and Plan- ning Sections of the Energy Department, and as required with the Bank of Uganda's Petroleum Desk and the Ministry of Finance, on all e;onomic aspects of the petroleum sector. He will. 1. Advise on the general work program of the Petroleum Section; 2. Assist and advise on the analysis of petroleum demand; 3. Assist the Planning Section on all petroleum aspects of energy analysis and forecasting; 4. Provide technical advice on petroleum matters; 5. Assist in the examination of least cost supply and distribution options; 6. Monitor the progress of petroleum exploration activities and organize liaison with the Geological Survey Department; 7. Contribute advice on petroleum matters in the context of the preparation of the national energy plan; 8. Attend meetings of the Joint Petroleum Committee; 9. Participate in the training of Departmental and other Local staff;  -53- Annex 2 Page 5 of 6 10. Maintain liaison with oil companies and major oil consuming agencies, e.g. Uganda Railways and industrial users; and 11. Examine and advise on efficiency and conservation aspects of petroleum consumption and use. Woodfuels Adviser The Woodfuels Adviser will work with the Woodfuels and Renew- ables Section of the Energy Department and in close consultation with the Forest Department of the Ministry of Agriculture and Forestry. He will: 1. Advise the Woodfuels Section on the technology of the woodfuels sector; 2. Assist in the development of the Section's work program; 3. Advise on the general contribution of the woodfuels sector to the energy economy; 4. Assist in the development of an appropriate statistical system for the development and monitoring of energy plans and poli- cies; 5. Maintain liaison with the Forestry Department, the Forest Research Department, and the Forestry Department at Makerere University; 6. Advise on the preparation and carrying out of surveys of wood- fuel use in the subsistence and cash sectors; 7. Examine and advise on arrangements for the marketing and pric- ing of woodfuels; 8. Carry out analysis of factors affecting substitution between wood and other fuels; 9. Advise on woodfuel supply policies: agro-forestry, plantation schemes in rural and peri-urban areas; 10. Carry out examination of charcoal sector and marketing arrange- ments; 11. Review th.e status of existing technical assistance projects in the fuelwood sector; and 12. Advise the Efficiency Section on matters related to woodfuel appliance efficiency.  -54- Annex 2 Page 6 of 6 Energy Efficiency Adviser The Energy Efficiency Adviser will work with the Efficiency Section of the Energy Department, and in particular will: 1. Advise the Efficiency Section on the practical, technical, economic, and conceptual aspects of energy efficiency and conservation and on the development of its work program; 2. Identify opportunities for improving energy efficiency in all. -stages of fuel production, transportation, distribution, and consumption; 3. Monitor existing energy audit schemes, arrange follow-up -studies, and identify new candidates for audits among main energy users; 4. Advise on energy saving equipment and construction techniques in new investment and building programs; 5. Advise on the preparation of a national energy efficiency and conservation program and techniques for implementation and monitoring; 6. Provide training in energy management; and 7. Assist in establishment of Energy Users Advisory Committee and its relationships with industrial, social, local government and other representative bodies.  -55- Annex 3 Page 1 of 4 SENIOR MANAGEMENT OF THE ENERGY DEPARTMENT The Government of Uganda has decided that the new Energy Department should be led by an Energy Commissioner and a Deputy Commis- sioner. Energy Commissioner The Commissioner will be the head of the Department at the rank of a Senior Under Secretary. He will formally report to the Minister through the Permanent Secretary of the MPPT, but because of the special- ized nature of this post he will often be required to advise Ministers and other Senior officicals directly on energy matters and also to communicate closely with senior management in the fuel industries and other outside bodies. The Commissioner will be required to represent the Government's interests in negotiations on energy questions both inside Uganda and internationally and will therefore be responsible for establishing the role and status of the new Department, and for managing its staff, as well as for presenting its work and policies. The Commissioner will not be directly involved in the day-to- day running of the Department but will be responsible for the general direction of its work and priorities and be familiar with all aspects of its operations. He will be Chairman of the proposed high level Energy Policy Committee and its principal spokesman. Deputy Commissioner The Deputy Commissioner should have a more direct management and operational role in the Department as well as deputizing for the Com- missioner as necessary. He will be the effective head of the Planning and Central Services Section of the Department and be responsible for directing and supervising the work of the administrators, economists and statisticians in the Department. He will thus be closely involved in the day-to-day work of information, research, analysis and advice on all aspects of the energy economy and in supervising the preparation of papers and studies on energy policy and planning. He will also work closely with planners and policy makers in other Ministries and in the fuel industries. He will be in many ways the Managing Director of the Department in its day-to-day work and will therefore need to have good organizing ability and an interest and understanding of the methods and techniqucs of the other professional members of the Department's staff. He will be a major source of new policy ideas and initiatives and will be the main local counterpart for the Energy adviser with whom he will work closely. Both of these senior officials, who will be working in a new Department and establishing its role within the Coverr.ment machine as a whole, will need to be able to communicate new ideas and policies over a wide range of energy matters which will often have a high technological  -56- Annex 3 Page 2 of 4 content as well as a considerable public relation component. Intially the Energy Department will have to deal with older, more well established Departments and other agencies and its general performance and image will depend critically on the personal qualities of the incumbent of these two senior posts. Principal Assistant Secretary The Principal Assistant Secretary will be the senior adminis- trative official i. the Department. He will be a major link between the Energy Department and the rest of the Ministry as well being responsible for administrative matters within the Department itself. He will act as Secretary to the interdepartmental Energy Policy Committee, -"eparing its meetings and agendas and ensuring the timely distribution of papers and reports. In the first year the PAS will also be responsible for the supervision of a small technical section dealing with energy efficiency programs, woodfuels and other renewable forms of energy. While not necessarily having special skills or experience in energy matters at the beginning the PAS should have some experience in economic or industrial affairs. The PAS will have the usual qualifications and personal qualities for recruitment or promotion into a post of PAS but special importance will be attached to working in a team containing a number of professional staff. This post is an important and rewarding one for a bright and imaginative young official with drive and ambition, as well as administrative competence. Senior Economist The Senior Economist in the Energy Department will be respon- sible for economic advice, research and analysis on all aspects of the Uganda energy economy. He will direct and supervise the work of the other economists in the Department on matters such as demand forecasting, pricing poLicy, project appraisal and other macro- and micro-economic aspects of energy and fuel policy including energy utilization and conservation. He will be required to work with and consult economists and planners working in the fuel supply industries and in other branches of the Government and on technical economic matters to represent the Department on committees and working groups as required. He will be required to prepare briefs and option papers for senior officials and Ministers under the general direction of the Deputy Commissioner and Commissioner for Energy. The Senior Economist will have good academic qualifications (at least a good second class degree) with several years relevant experience in higher studies or work as an economist in Government, industry or financial institutions. Experience in an energy related field would be an advantage. He shouLd have a good grounding in basic economic theory, applications and techniques including econometrics, project appraisal and cost-benefit analysis and will aLso have to direct and supervise the worx of unior staff.  -57- Annex 3 Page 3 of 4 Since the holder of the post will be requiced to work on a wide range of energy related subjects he should be flexible and practical in his approach and be able to acquire an understanding of energy technology in various industries. His advisory duties will also call for clarity of expression both in speech and writing as well as an ability to explain technical problems and concepts to non-specialists in his own field. The Senior Economist will be acquired to work closely with the Deputy Commissioner and share with him in the local counterpart role with the Energy Adviser and other Technical Assistance experts. Senior Statistician The Senior Statistician in the Energy Department will be responsible for the collection, compilation and processing of all the statistics required in support of energy policy and planning. He will direct and supervise the work of. the other statisticians in the Depart- ment and will be required to work closely with statisticians and record keepers in the fuel industries and with che Statistics Office in the Ministry of Planning. He will be required to develop time series, index numbers and seasonal adjustments relating to the supply and consumption of all fuels and be prepared to familiarize himself with the special requirements of this field in relation to energy balances, conversion factors, and other international practices and conventions. He will be required to present his work in attractive and readily cozmprehensible forms in briefs, policy papers and publications. He will have good academic qualifications in statistics or mathematics (at least a good second class degree) with several years relevant experience in higher studies or work as a statistician in the Government, industry, or financial institutions. He should be fully familiar with basic statistical concepts and techniques and the special need for good presentation of quantitative information in readily under- standable forms. If he has not previously worked in the energy field then he will have to show an ability to work with new concepts. He will also have to show initiative and imagination in developing new sources of information through field surveys and sampling methods. The Senior Statistician will be the principal local counterpart for the Statistical Adviser being appointed under the TA program, working closely with him in Uganda and, when he is away, implementing his recom- mendations for the reorganization of the statistical system. Economist/Engineer The holder of this post will work in the Energy Efficiency Section of the Department and will be required to carry ouc studies of energy use in industry, transport and other sectors of the economy. He/she will work within the general efficiency program of the Department in coorperation with administrators and economists, and be able to carry out surveys and other investigations into the efficiency of energy use.  -58- Annex 3 Page 4 of 4 The holder of this post should be either an economist with a good academic record and special interest, qualifications or experience in industrial matters OR an engineer/technologist with interests or experience in economics or industrial management. It would be an advantage to have experience in energy matters, but some additional training will be available to help to develop the balance of skills required by the job. The main requirements are for someone with good all-round interests or experience and with a technical/economic background. If he does not have the dual background immediately he must be the sort of person who can adapt his own professional skills to a wide range of problems. He will also need to be a person who has shown some evidence of initiative and imagination *and also be the kind of person who can carry out visits to industrial and other businesses to get the kind of information needed and prepare reports and recommendations. When the energy efficiency and. conservation expert to be provided under the TA arrangements is appointed the holder of this post would be one of his main counterpart staff.  MWERGY SECTOR ANAGE4RENT ASSISTANCE PROQMU44 The Joint UNDP/World Bank Energy geetor Management Assistance Program (ESMAP), started in April 1983, assists countries in lmplementing the main investment and policy recommendations of the Energy Sector Assessment Reports pro4uced ,under another Joint UNDP/World Bank Program. ESMAP provides staff and consultant assistance in formulating and justifying priority pre-investment and investment projects and in providing management, institutional and policy support. The reports produced under this Program provide governments, donors and potential investors with the information needed to speed up project preparation and implementation. ESMAP activities can be classified broadly lnto three groups: - Energy Assessment Status Reports: these evaluate achieve- ments in the year following issuance of the original assessment report and point out where urgent action is still needed; Project' Formulation fnd Justification: work designed to accele,rate'the preparation and implementation of investment projects; and - Institutional and Policy Support: this work also frequently leads to' the identification of technical assistance packages. The "Program aims to supplement, advance and strengthen the impact of bilateral and multilatera-l resources' already available for technical assistance in the energy sector. Funding of the Program The Program is a major international effort and, while the core finance has been provided by the UNDP and the World Bank, important financial contributions to the Program have also been made 1y a number of bilateral agencies. Countries which have now made or pi'dged initial contributions to the programs through the UNDP Energy Account, or through other cost-sharing arrangements with UNDP, -are the Netherlands, Sweden, Australia, Switzerland, Finland, United Kingdom, Denmark, Norway, and New Zealand. Further Inforwation For further information on the Program or to obtain copies of completed ESMAP reports, which are listed at the end of this document, please contact: Division for Global and OR Energy Assessments Division Interregional Projects 'Energy Department United Nations Development World Bank Program ' 1818 H Street, N.W. One United Nations Plaza Washington, D.C. 20433 New York, N.Y. 10017 C) ~ .Z. ,.