Exploration, Extraction and Direct Use of Geothermal Resources in Uganda

Geothermal resources means a reservoir of heat occuring naturally within the subsurface of the earth carried to the earth’s natural surface by water or a stream.

According to The Mining and Minerals Act 2022 “direct use of geothermal resources” includes application in greenhouses, horticulture, aquaculture, heating buildings, drying crops, pasteurizing milk, natural spas and any other industrial or commercial processes or applications. The same procedure and rules regarding application for prospecting licence is used when applying for a prospecting licence in respect to geothermal resources. Similarly, the same procedure and rules regarding application for an exploration licence is used when applying for an exploration licence in respect to geothermal resources.

An exploration licence for the exploration of a geothermal resource, once granted, in addition to the rights confer upon the licencee additional rights to to enter upon the land within the area of the licence and sink a well or to do all things that are reasonably necessary for the conduct of operations for the exploration of a geothermal resource; and a right to in so far as it may be necessary for and in connection with the operations  to drill and construct wells; reclaim and utilise water subject to  any other written law governing water resources; and to construct and maintain roads and other means of communication.

 An application for a licence for extraction of geothermal resources for direct use is made to the Minister in a prescribed manner and must  contain a copy of a valid exploration licence or retention licence; contain proof of payment of any applicable taxes and fees due; in respect of the company contain the registered name and place of incorporation of the company; the certificate of incorporation and a certified copy of the memorandum and articles of association; a board resolution, the names and nationalities of the directors and the name of every shareholder who is the beneficial owner of five percent or more of the issued share capital; where applicable, the company profile and history of mining or geothermal operations in Uganda and elsewhere and the details of any mineral rights or licences held in Uganda, by the applicant or by any person controlling, controlled by or under joint or common control with the applicant.

The application must also state the period applied for, informed by a feasibility study; state that the licence is sought in respect of a geothermal resource; state the direct use of geothermal resources in respect of which the licence is sought;  be accompanied by a plan of the area over which the licence is sought; identify, the name and qualifications of the person responsible for supervising the proposed programme of geothermal operations; be accompanied by a statement giving details of the geothermal resource in the area of land over which the licence is sought, including details of all known geothermal resources proved, estimated or inferred and reserves, and geothermal conditions in accordance with recognised international geothermal standards; be accompanied by a statement of particulars of expected infrastructure requirements; an environmental and social impact assessment in accordance with the National Environment Act, 2019; a feasibility study and assessment carried out by appropriate experts or accredited consultants the extent and prospect for recovery and the commercial and economic significance of the geothermal resource concerned; and a detailed timetable for the work which is to be carried out.

The application must also contain the identification of interested and affected parties including the registered owner, customary owner, lawful occupant or bonafide occupant of the proposed geothermal area and proof of consultation with interested and affected parties and the results of the consultation; a report on the goods and services required for the geothermal operations which can be obtained within Uganda and the applicant’s proposals with respect to the procurement of those goods and services;  a statement giving particulars of the applicant’s proposals with respect to the employment and training of citizens of Uganda and technology transfer; details of the applicant’s proposals for insurance including life and health cover for its employees and workers’ compensation; the proposed marketing arrangements for the applicable direct use of the geothermal resource; the financial and technical resources available to the applicant to carry out his or her obligations under the licence; a plan for co-existence with customary landowners or communities owning the land in the area subject to the licence;  a business plan giving a detailed forecast of capital investment, operating costs and revenues; and the anticipated type and source of financing including the year for the positive cash flow, financial plan and capital structure.

Additionally, the application must contain a report on the results from the exploration, with regard to the type, quality, temperature, flow rate and geographic location of the geothermal resource identified; a statement giving particulars of the proposed programme of geothermal operations, including a statement of the estimated date by which the applicant intends to work for profit;  the estimated capacity of production and scale of operations; the estimated heat in MWth (Megawatts thermal); the nature of the direct use; proposals for the progressive rehabilitation and decommissioning of land disturbed by geothermal operations and for the mitigation of the effects of the operations on surface water and ground water and on adjoining or neighbouring lands; the effects of the geothermal operations on the environment and on the local population and proposals for mitigation, compensation and resettlement;  any particular health or other risks involved in geothermal operations and proposals for their control or elimination;  restitution of land rights at the expiry or termination of a licence for extraction of geothermal resources for direct use or after closure of the geothermal site.

The application for a geothermal licence must be advertised in the gazette, news paper of nation wide circulation or any other electronic media and copies of the plan and maps displayed at the relevant district or sub county and parish headquarters. Upon receipt and recommendation by the Mining Cadastre Department, the Minister is required to within sixty days issue the licence with terms and conditions  to which the applicant shall within thirty days of such receipt accept in writing the terms and conditions of the licence failure of which the application shall be deemed to have lapsed. The licence must also be advertised in the gazette, news paper of nation wide circulation or any other electronic media.

The area covered by the licence for extraction of geothermal resources for direct use must be demarcated by the shape of the geothermal resource and must not exceed five square kilometres. The licence is granted for a period not exceeding 10 years with an option to renew the same fifteen months before it expires for another period not exceeding 7 years.

The holder of a licence for extraction of geothermal resources for direct use has the exclusive right to carry on exploration and geothermal operations in the licence area and may take all reasonable measures on and under the surface of the licence area to extract and use the geothermal resource to which his or her licence relates; enter into the land within the area of the licence for extraction of geothermal resources for direct use to establish a facility and extract geothermal resources and to do all such things as are reasonably necessary for the conduct of those operations; erect the necessary equipment, plant, machinery and buildings for the purpose of using the geothermal resource during geothermal operations in accordance with the approved geothermal development plan; reclaim and utilise any water in accordance the applicable written law governing water resources; take and use the geothermal resource for the purpose specified in the licence; and store or dispose of any waste product in accordance with the National Environment Act, 2019 and geothermal industry best practice.