Analyzing Uganda’s Hydro-power and Policy Nexus: Insights from a Structural Vector Auto-Regression Mode

Analyzing Uganda’s Hydro-power and Policy Nexus: Insights from a Structural Vector Auto-Regression Mode | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article Analyzing Uganda’s Hydro-power and Policy Nexus: Insights from a Structural Vector Auto-Regression Mode Mohammed O A Hamid This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-7569800/v1 This work is licensed under a CC BY 4.0 License Status: Posted Version 1 posted You are reading this latest preprint version Abstract Uganda’s transition to renewable energy is critical for achieving sustainable development, yet significant challenges persist in energy access, infrastructure expansion and policy effectiveness. This study utilizes a structural vector auto-regression SVAR modelling to forecast and analyze Uganda’s hydro-power on economic growth and to quantify interactions between policy shocks and macroeconomic outcomes, using time-series data (2026-2030) depending on history data from national energy reports and macroeconomic indicators. Endogenous variables (hydro-power capacity, electrification rates, industrial gross domestic product GDP and tariffs) and exogenous shocks (oil prices and climate finance) are evaluated through impulse response functions IRFs and variance decomposition VD. Results indicate that hydro-power investments generate effects with substantial time lags. A 120 MW capacity increase is associated with a 2.7% rise in electrification rates (peaking around 2029), a 0.6% increase in industrial GDP (peaking around 2027), and a cumulative reduction in electricity tariffs of 0.025 USD/kWh over a ten-year period. VD attributes 42% of electrification variability to hydro-power shocks. Oil price volatility significantly affects macroeconomic stability. A 15 USD/barrel increase reduces GDP growth by 0.8% within two years, though this effect can be mitigated by compensatory hydro-power investments of 30 USD M. Climate finance exhibits strong but diminishing marginal returns. A 100 USD M investment boost achieves a 2.7% increase in electrification rates by 2030, accounting for 35% of the observed variation in electrification access. Energy Engineering Macroeconomics Hydro-power Structural Vector Auto-Regression SVAR Impulse Response Functions IRFs Variance Decomposition VD. Full Text Additional Declarations The authors declare no competing interests. Cite Share Download PDF Status: Posted Version 1 posted You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. Our growing team is made up of researchers and industry professionals working together to solve the most critical problems facing scientific publishing. Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-7569800","acceptedTermsAndConditions":true,"allowDirectSubmit":true,"archivedVersions":[],"articleType":"Research Article","associatedPublications":[],"authors":[{"id":512271236,"identity":"938e31d4-36b8-49c5-a242-c2686056d715","order_by":0,"name":"Mohammed O A Hamid","email":"data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAZAAAAAyAQMAAABI0h/eAAAABlBMVEX///8AAABVwtN+AAAACXBIWXMAAA7EAAAOxAGVKw4bAAABEklEQVRIiWNgGAWjYFACHjDJ2MDAwAakJRj7Sdcys4FELQyMGw4Q0KDb3nvw080cG9kG9uZnD37mWMhuPn/G7AFDjR2DwfkFWLWYnTmXLJ27Lc24geeYuWHvNgnjbTdyzA0YjiUzGNx4gF3LjRwDoJbDiQ0SCWYSvNskErfd4DGTYGA7ANSC3YlALca/c7f9B2pJ/yb5F6hlc/8ZoJZ/eLWYAW05ANQCZIBs2cCQYybB2AbUcr4Bh1/OmFnnbks2buM5UyYtC/TLjBtpZRKJfck8kjewh5jZ8R7j27nb7GT72du3Sb7dVifb3394m8SHb3ZyfOexOwwO2FB4CaD4kkjArwUL4CdgyygYBaNgFIwUAADATGH7f9uzmwAAAABJRU5ErkJggg==","orcid":"https://orcid.org/0000-0001-7448-3584","institution":"Soroti University","correspondingAuthor":true,"prefix":"","firstName":"Mohammed","middleName":"O A","lastName":"Hamid","suffix":""}],"badges":[],"createdAt":"2025-09-09 06:06:49","currentVersionCode":1,"declarations":{"humanSubjects":false,"vertebrateSubjects":true,"conflictsOfInterestStatement":false,"humanSubjectEthicalGuidelines":false,"humanSubjectConsent":false,"humanSubjectClinicalTrial":false,"humanSubjectCaseReport":false,"vertebrateSubjectEthicalGuidelines":true},"doi":"10.21203/rs.3.rs-7569800/v1","doiUrl":"https://doi.org/10.21203/rs.3.rs-7569800/v1","draftVersion":[],"editorialEvents":[],"editorialNote":"","failedWorkflow":false,"files":[{"id":90978270,"identity":"da07decd-38dc-460f-85e7-63201d16edc7","added_by":"auto","created_at":"2025-09-10 08:56:14","extension":"pdf","order_by":1,"title":"","display":"","copyAsset":false,"role":"manuscript-pdf","size":623680,"visible":true,"origin":"","legend":"","description":"","filename":"SVARPaper.pdf","url":"https://assets-eu.researchsquare.com/files/rs-7569800/v1_covered_9ffb9994-5772-474c-bf68-851cb601f814.pdf"}],"financialInterests":"The authors declare no competing interests.","formattedTitle":"\u003cp\u003eAnalyzing Uganda’s Hydro-power and Policy Nexus: Insights from a Structural Vector Auto-Regression Mode\u003c/p\u003e","fulltext":[],"fulltextSource":"","fullText":"","funders":[],"hasAdminPriorityOnWorkflow":false,"hasManuscriptDocX":false,"hasOptedInToPreprint":true,"hasPassedJournalQc":"","hasAnyPriority":true,"hideJournal":true,"highlight":"","institution":"Soroti University","isAcceptedByJournal":false,"isAuthorSuppliedPdf":true,"isDeskRejected":"","isHiddenFromSearch":false,"isInQc":false,"isInWorkflow":true,"isPdf":true,"isPdfUpToDate":true,"isWithdrawnOrRetracted":false,"journal":{"display":true,"email":"[email protected]","identity":"researchsquare","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":true,"externalIdentity":"","sideBox":"","snPcode":"","submissionUrl":"/submission","title":"Research Square","twitterHandle":"researchsquare","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"","reportingPortfolio":"","inReviewEnabled":false,"inReviewRevisionsEnabled":true},"keywords":"Hydro-power; Structural Vector Auto-Regression SVAR; Impulse Response Functions IRFs; Variance Decomposition VD.","lastPublishedDoi":"10.21203/rs.3.rs-7569800/v1","lastPublishedDoiUrl":"https://doi.org/10.21203/rs.3.rs-7569800/v1","license":{"name":"CC BY 4.0","url":"https://creativecommons.org/licenses/by/4.0/"},"manuscriptAbstract":"\u003cp\u003eUganda’s transition to renewable energy is critical for achieving sustainable development, yet significant challenges persist in energy access, infrastructure expansion and policy effectiveness. 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