UEDCL to spend over Shs 40 billion in nine months after UMEME exit

KAMPALA, April 18, 2025 — The Uganda Electricity Distribution Company Limited [ UEDCL ] will utilise up to Shs 43.3 billion over the next nine months to fund its operations, marking a significant step in its transition as the country’s primary power distributor following the exit of UMEME on March 31, 2025.

This funding, originally part of the UMEME buyout fund, will be recovered through electricity tariffs and used as seed capital to help UEDCL stabilise and invest in the electricity distribution network, according to Zilia Wako, Executive Director of the Electricity Regulatory Authority [ERA].

Speaking at the second Electricity Sector Bazaar in Kampala on Tuesday, Wako said Cabinet had approved the transfer of these funds to UEDCL with the goal of ensuring a seamless takeover. “The government has paid the buyout amount and has given UEDCL the US$ 118 million to recover through the tariff with interest, and invest as seed capital,” Wako said.

She emphasised that this funding is more than UMEME ever received in a single year. “UEDCL has US$ 100 million at its disposal for the next nine months. UMEME has not been able to reach that in any particular year,” she noted, adding that the support has been built into the electricity tariff structure to ensure sustainability.

Wako further said UEDCL will benefit from additional financial support, including US$ 683 million from the World Bank under the Scale-Up Project. This funding targets renewable energy rollouts in rural areas, particularly for social institutions like schools and hospitals, and aims to accelerate access to electricity for all Ugandans by 2030.

Alongside the funding, performance benchmarks have been set for UEDCL. These include reducing electricity losses to 14.59 percent within nine months, and to 13.65 percent and 13.31 percent in the following two years. The revenue collection target has also been set high, at over 99.85 percent annually, leveraging the country’s prepayment metering system.

To tackle delayed payments, especially from government agencies, Wako revealed plans to enroll all public institutions on prepaid metering, following an agreement with the Ministry of Finance, Planning and Economic Development.

Before UMEME’s exit on April 1, 2025, it had maintained electricity losses at 16 percent, collected Shs 2.5 trillion in revenue, and reached over 2 million connections, averaging 100,000 new connections annually and monetising 84 percent of all power received from the Uganda Electricity Transmission Company Limited [UETCL].

Despite its larger footprint, UMEME did not serve all areas. Eng. Protaze Tibyakinura, UEDCL’s Chief of Engineering and Technical Services, noted that UEDCL had long operated in some of the most difficult-to-reach areas, distributing electricity to over 240,000 customers, all under the prepaid model.

“We are not new to this task. In fact, during the transition, we’ve focused on restoring damaged infrastructure and fast-tracking all certified connections that were pending under UMEME at no extra cost to consumers,” Tibyakinura said.

https://thecooperator.news/umeme-suspended-from-use-after-handover-to-uedcl/

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