By Spy Uganda
Uganda has officially transitioned its electricity distribution from Umeme Limited to the Uganda Electricity Distribution Company Limited (UEDCL), marking the end of Umeme’s 20-year concession and ushering in a new era for the country’s energy sector.
The handover, presided over by Energy Minister Ruth Nankabirwa, represents a strategic shift aimed at improving financial sustainability, expanding electricity access, and enhancing service reliability.
“This marks the end of Umeme’s 20-year concession and a significant step in Uganda’s second-generation energy reforms,” Nankabirwa stated. “UEDCL now assumes full responsibility for electricity distribution, ensuring service continuity and improvements to the network.”
As the transition unfolds, discussions surrounding Umeme’s buyout amount have emerged. The energy ministry has acknowledged discrepancies between Umeme’s expectations and the Auditor General’s assessment, assuring that a harmonization process will determine a fair settlement.
“We have a period of harmonization commencing on April 1 to determine the final buyout amount, which will include investments made by Umeme that were not accounted for by the Auditor General,” Nankabirwa explained. “I can assure the Umeme board that we shall conclude this process smoothly because this is a natural end.”
Taking over the electricity distribution network during a political season presents additional challenges for UEDCL. Energy Minister Nankabirwa cautioned UEDCL’s Managing Director, Paul Mwesigwa, about potential pressures from politicians during campaigns.
“You are taking over during a political season that comes once every five years. It’s not going to be very easy for you. You will feel pressure from all the candidates in the political campaigns,” Nankabirwa noted.
Despite these challenges, Mwesigwa expressed confidence in UEDCL’s readiness for the transition. “We have already kicked off procurements, and our stores are stocked and ready. In the next ten working days, all connections should be up and running. We aim to clear all pending applications within three months. Our target for the year is 300,000 new connections,” he stated.
He further assured that UEDCL’s workforce will largely comprise former Umeme staff, ensuring continuity. “We conducted very fair interviews, and the new UEDCL structure of 2,712 staff members is primarily filled by former Umeme employees.”
Outgoing Umeme Managing Director Selestino Babungi reflected on the company’s contributions over the past two decades, highlighting significant growth and improvements in Uganda’s power sector.
“In 2005, we were given a very small switch. Today, we are handing over a very big switch,” Babungi said. “You gave me 250,000 customers, and I’m handing over 2.2 million customers. In 2005, we were transforming only 50% of the electricity from UETCL into cash. Today, we convert 84% of that power into cash. We leave with a sense of gratitude and pride for what we have been able to achieve.”
However, Babungi warned of Uganda’s rising electricity demand, stressing the need for investment in additional power generation. “If we don’t do anything, we might run out of power in the next three years. Though we are operationalizing the Eastern Africa Power Pool to source power from countries like Ethiopia, we need to invest in our own power plants.”
Minister Nankabirwa acknowledged the urgency of increasing Uganda’s electricity generation capacity. “We have already issued a notice for consultancy services to develop a 400MW plant. Soon, you will see us begin work on an even bigger power plant.”
Minister of State for Energy, Okaasai Opolot, reinforced the government’s commitment. “We take the warning about a potential power shortage seriously.”
The Electricity Regulatory Authority (ERA) CEO, Eng. Ziria Tibalwa Waako, emphasized that the transition from Umeme to UEDCL was meticulously planned over a five-year period.
“This momentous occasion marks the end of Umeme’s 20-year concession. Over this period, we have seen rehabilitation and upgrading of the electricity distribution network, improvement in operational efficiency, and reduction in energy losses. This transition was designed to ensure a seamless handover,” she stated.
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