The Uganda Electricity Distribution Company Limited (UEDCL) is gearing up to take over electricity distribution from Umeme Limited, whose 20-year concession ends on March 31, 2025.
This transition marks a significant shift in Uganda’s energy sector, with the government aiming to improve affordability, access, and reliability for consumers.
Staff Absorption: A Smooth Transition for Workers
UEDCL plans to absorb 2,502 Umeme employees, ensuring a seamless transition. According to Paul Mwesigwa, UEDCL’s Managing Director, the company will expand its workforce to 3,010 employees to manage the post-Umeme era effectively.
“We are committed to engaging all Umeme staff, interviewing and appointing those who are willing and qualified,” Mwesigwa stated.
While the exact percentage of staff retention remains unconfirmed, UEDCL aims for 100% engagement, with expectations of a high uptake.
Funding the Transition: A Shs4 Trillion Challenge
To stabilize the power sector, UEDCL is seeking Shs4.02 trillion to cover operational costs, capital investments, and the buyout of Umeme’s unrecovered investments. The breakdown includes:
- Shs904.5 billion to compensate Umeme shareholders.
- Shs844.2 billion for revamping aging infrastructure, including transformers that have exceeded their 30-year lifespan.
- Shs2.27 trillion for operational costs over the next three years.
The funding will be sourced through loans at 6.4% interest over 10 years, with additional support from power tariffs.
Related: Govt Ready to Take Over Umeme Concession by 2025, Says Nankabirwa
Challenges Ahead
The transition faces several hurdles, including financial readiness and declining service quality from Umeme ahead of its exit.
The Auditor General’s report highlighted insufficient funds in the escrow account, raising concerns about UEDCL’s ability to manage the takeover effectively.
However, stakeholders remain optimistic. The Electricity Regulatory Authority has expressed confidence in UEDCL’s potential to improve service delivery, provided the necessary funds are secured.
What’s Next?
As April 1, 2025, approaches, all eyes are on UEDCL to deliver a smooth transition. The success of this takeover will depend on effective staff integration, robust funding, and a commitment to improving Uganda’s electricity distribution network.
