Uganda Electricity Distribution Company Ltd (UEDCL) has reassured the public of a seamless transition in power distribution once Umeme Ltd’s 20-year concession expires in March 2025.
This commitment was made during a public hearing at the Imperial Royale Hotel in Kampala, organised by the Electricity Regulatory Authority (ERA) to scrutinise UEDCL’s application for a distribution licence.
Paul Mwesigwa, UEDCL’s Managing Director, highlighted the company’s readiness, emphasising that they would absorb all 2,502 Umeme employees and continue with uninterrupted service.
He noted that UEDCL is not only taking back assets from Umeme but also plans to expand its network and staffing.
“We will ensure that even on the day of the takeover, there will be no interruptions, and customers will only be notified on how to check and top up tokens,” he stated.
On UEDCL’s ability to achieve a 99.76% revenue collection rate, Mr. Mwesigwa pointed to past successes as evidence of their capacity.
“In the areas where we currently operate, we have seen revenue grow from UGX 36.1 billion in 2014 to UGX 100 billion by 2024. When we began, energy losses were at 28% in 2017, but we have managed to reduce them to 18.1% as of 2024, and we aim to continue improving. Our cash collection rate has reached 100%. We have a formula that involves employing the right technology, educating the community, training our staff, and efficiently collecting revenue,” Mwesigwa explained.
Mwesigwa also announced plans to connect all consumers, including government agencies, to the prepaid metering system (Yaka), a move welcomed by most, although some corporate entities like ATC raised concerns over the migration process.
He explained that UEDCL’s losses have been reduced to meet the ERA target, dropping from 28% in 2017 to 18.1% currently, while the cash collection rate has reached 100%.
“We have 99.9% of our customers connected to prepaid systems, and we aim to collect 100% of revenue. With this experience and our new business model, combined with the Authority’s support in granting licences and setting appropriate tariffs, Ugandans can be assured of a reliable national distributor that drives socio-economic transformation,” Mwesigwa said.
UEDCL plans to invest UGX 4 trillion over the next three years, targeting the connection of 300,000 new customers annually and reducing national energy losses from 16.4% to 15.2% by 2027.
Jacqueline Kiwanuka, UEDCL’s Chief Finance Officer, revealed that part of the financing will come from a $435 million loan at 6% interest.
Addressing concerns over UEDCL’s capacity, Engineer Ziria Tibalwa Waako, ERA’s Chief Executive Officer, assured the public of the company’s preparedness, adding that the transition aligns with government policies to rationalise public services.
Eng. Waako emphasised that the shift supports the Second Generation Reforms in the electricity sector, which aim to phase out private sector concessions, including Umeme’s.
She explained that the total amount the government will pay Umeme to recover its investments will be finalised on March 31, 2025.
“The Authority has reviewed and considered the investments made by Umeme Limited. I want to assure Ugandans that we have a good product, and with such a product, the government will certainly determine the buyout amount. We have worked closely with UEDCL, the asset owner, and Umeme, the implementer, to conduct thorough reviews, analyses, and verifications. This will allow us to advise the Office of the Auditor General, which is responsible for determining the buyout amount, using our data as we have been overseeing the company daily,” she explained.
She added, “The buyout estimates have been submitted, and we continue to update them as the company is required to invest up until March 31, 2025. Many have asked me about the buyout amount. The truth is, it’s a work in progress. We may have estimates, but the final figure will only be determined after March 31, 2025, as the company continues to replace old poles and failing transformers. It’s a live business, and the final amount will only be set after all investments are made,” Eng. Ziria emphasised.
ERA Board Chairperson, Dr. Sarah Wesagali Kanaabi, also vouched for UEDCL’s capabilities, pointing out that the company has successfully taken over other private concessions such as PACMES and Kilembe Investments Ltd.
“UEDCL has proven itself capable of delivering quality services in areas where other distributors couldn’t reach. We are confident in their ability to manage this national concession effectively,” she said.
Under Section 29 of the Electricity Act of 1999, UEDCL must apply for a licence for the distribution and sale of electricity in Uganda as it plans to take over Umeme operations.
As the countdown to the transition begins, ERA and UEDCL continue to engage stakeholders to ensure a smooth handover, while Umeme remains operational until the last day of the concession.
