Uganda’s government has reaffirmed its readiness to assume control of the country’s electricity distribution network from Umeme Limited, with the transition set to begin on April 1, 2025.
Energy Minister Ruth Nankabirwa emphasized the government’s commitment to ensuring a seamless transition, improved service quality, and addressing power reliability challenges.
The Transition Plan
The takeover will be managed by the Uganda Electricity Distribution Company Limited (UEDCL), a state-owned entity.
Nankabirwa stated, “The government is fully prepared to take over the Umeme concession through UEDCL. We are committed to improving service quality and ensuring a smooth transition.”
However, the process faces hurdles, including a Shs692.688 billion ($190 million) loan from Stanbic Bank Uganda for Umeme’s buyout.
The Auditor General’s office has raised concerns, calling for a delay in Parliament’s approval until a thorough audit of Umeme’s submitted figures is completed.
Auditor General’s Concerns
Joseph Hirya, Director of Audit, highlighted discrepancies in Umeme’s financial figures, urging Parliament to wait for accurate data before approving the loan.
“We request a few more days to provide the actual figures. It’s better to pay interest on the loan knowing it’s based on accurate figures,” Hirya told Parliament’s Committee on National Economy.
Financial and Operational Challenges
The Ministry of Finance is finalizing arrangements to secure $50 million (Shs185 billion) through internal borrowing to support UEDCL’s capital investments. Despite this, concerns remain about UEDCL’s readiness.
Engineer Ziria Tibalwa, CEO of the Electricity Regulatory Authority (ERA), noted that financial constraints and inadequate preparation could hinder the transition.
“We aren’t even ready with the $50 million for UEDCL to start,” Tibalwa said, suggesting that early investments in collaboration with Umeme would have eased the process.
Addressing Power Outages and Staffing
Recent power outages have exposed challenges in the transition, with Tibalwa attributing them to clauses in Umeme’s concession that limit government intervention until the contract ends.
Meanwhile, the Ministry of Energy is restructuring UEDCL to enhance efficiency and eliminate role duplication. The recruitment process has been transparent, ensuring the most qualified personnel are retained.
Nankabirwa’s Call for Urgency
Nankabirwa urged lawmakers to expedite the loan approval, warning that delays could lead to costly interest penalties.
“The government must move quickly to ensure a seamless transition,” she said, adding that any discrepancies in financial figures would be addressed promptly.
