- Uganda Electricity Distribution Company Ltd (UEDCL) has promised a seamless transition when Umeme Ltd’s power distribution consensus expires next year in March 2025.
- Umeme will continue with normal operations until the last day, including receiving and processing electricity connections for new customers.
Uganda Electricity Distribution Company Ltd (UEDCL) has promised a seamless transition when Umeme Ltd’s power distribution consensus expires in March 2025.
In 2022, the government decided the 20-year concession would not be renewed for various reasons, including underperformance in electricity distribution, costly payments to the concessionaires, and the need to rid public services of private operators where necessary generally.
State-owned UEDCL is one of the companies that has applied to take over from Umeme, and the Electricity Regulatory Authority (ERA) and other relevant government agencies are scrutinizing this license application.
Speaking at a public hearing on UEDCL’s intention to take over, the company’s Managing Director, Paul Mwesigwa, said that they are not taking back the assets that have been operated by Umeme but are also prepared for a 100 per cent absorption of the current Umeme staff of 2,502.
If the company is granted the concession, it promises to connect all consumers, including private and government agencies, to the prepaid metering system, commonly known as Yaka.
This caused discomfort among some corporate consumers, with tower company ATC asking for exceptions as it will be “tedious to migrate”, yet they have consistently complied with payments.
Mwesigwa promised that there would be no service interruptions even on the day of the takeover, adding that only a notification on how to check for and make a token top-up would be sent to all customers that night.
According to the transition plan that ERA and UEDCL have been discussing with Umeme, Umeme will continue with normal operations until the last day, including receiving and processing electricity connections for new customers.
As part of its strategy, UEDCL plans to connect at least 300,000 customers annually and increase its office network from the current 65 to 100 countrywide, including some of those occupied by Umeme. UEDCL plans to lower the national average energy losses from the current 16.4 to 15.2 per cent by 2027.
They also promise to reduce to 45 the number of days taken before paying transmission companies (in this case, Uganda Electricity Transmission Company Ltd) so that they can pay the generation companies and ensure a stable ecosystem.
To achieve all this, UEDCL will present a financing plan of 4 trillion Shillings for the next three years, which will partly be used to buy out Umeme and to make new investments.
The Chief Finance Officer, Jacqueline Kiwanuka, said that part of this money would come from a planned 435 million-dollar (1.6 trillion Shillings) loan, with a 6 per cent annual interest rate and a 10-year repayment period.
The Umeme buyout is planned at 225 million dollars (827 billion shillings), while 210 million (772 billion Shillings) will help fund new investments over the next three years.