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.
The handover, presided over by Energy Minister Ruth Nankabirwa, signifies a major shift in the country’s energy sector, with UEDCL assuming full control to enhance financial sustainability, expand access, and improve 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.”
Harmonisation of the Buyout Amount
Umeme has raised concerns regarding the buyout amount, which differs from the Auditor General’s report. Addressing these concerns, Nankabirwa assured a smooth resolution.
“We have a period of harmonisation 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. I can assure the Umeme board that we shall conclude well because this is a natural end.”
Challenges for UEDCL in a Political Season
As UEDCL takes over, its Managing Director, Paul Mwesigwa, acknowledged the hurdles ahead, particularly in an election season.
“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. You can ask Selestino Babungi,” Nankabirwa advised Mwesigwa.
Mwesigwa, however, expressed 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 further assured fairness in recruitment. “We conducted very fair interviews, and the new UEDCL structure of 2,712 staff members is primarily filled by former Umeme staff.”
A Legacy of Growth
Outgoing Umeme Managing Director Selestino Babungi reflected on the journey since 2005 and highlighted significant 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 about Uganda’s increasing power demands. “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.”
Government’s Commitment to Power Generation
Minister Nankabirwa acknowledged the need for additional power generation. “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, echoed Babungi’s warning, stating, “We take the warning about a potential power shortage seriously.”
Reflections from Umeme’s Leadership
Patrick Bitature, Chairman of Umeme’s Board, discussed the challenges faced and lessons learned. “You get what you pay for. While some say we’re expensive, it’s been a journey. Corruption was a major challenge—Umeme was ranked #1 in corruption when I joined 15 years ago.”
He reassured that most of Umeme’s staff had been absorbed into UEDCL. “80% of our staff have been absorbed. So, we are handing over a well-trained and motivated team.”
However, he acknowledged concerns over the buyout sum. “We still have work to do. Negotiations will continue, and I will have to explain to our shareholders because the buyout amount we received is not what they expected.”
Regulatory Perspective
Eng. Ziria Tibalwa Waako, CEO of the Electricity Regulatory Authority, emphasised that this transition was carefully planned over five years.
“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 to ensure a smooth handover.”
With UEDCL now in full control of electricity distribution, stakeholders remain optimistic about the future. With $74 million secured for operations this year, Mwesigwa stated, “We believe we are starting on a strong note, and we’re excited about the future.”
