The electricity distribution sector has entered a new era as Umeme officially handed over its assets to the Uganda Electricity Distribution Company Limited (UEDCL), marking the end of its 20-year concession.
The transition is part of Uganda’s second-generation energy reforms aimed at improving financial sustainability, expanding access, and enhancing the reliability of electricity supply.
Minister of Energy and Mineral Development , Ruth Nankabirwa said “UEDCL now assumes full responsibility for electricity distribution, aiming to enhance financial sustainability, expand access, and improve reliability.
“It will maintain service continuity, with improvements to the network and services to ensure a reliable electricity supply.”
To ensure a smooth transition and improve the electricity distribution system, the government of Uganda has made substantial financial commitments. The cabinet approved the borrowing of up to $190.1 million (about Shs700 billion) to finance the buy-out amount for Umeme and an additional $50 million for UEDCL’s investment needs.
The Ministry of Energy and Mineral Development, in collaboration with its partners, has also mobilized another $50 million ( 150 bn) from ABSA Bank to address network deficiencies and improve the reliability and quality of electricity supply.
Minister Nankabirwa urged Ugandans to be patient as UEDCL works on upgrading the system to meet the growing power demand.
Minister Nankabirwa issued a stern warning to UEDCL, making it clear that failure to meet expectations could lead to consequences. “We have no business with you when you are not performing,” she cautioned, urging the utility to maintain high service delivery standards.
At the handover the Permanent Secretary , Ministry of Energy and Mineral Development, Eng .Irene Bateebe, said UEDCL’s new role as a national power distribution company was a major milestone in Uganda’s Energy landscape and assured tUgandans that the government had prepared for this handover and UEDCL has the capacity and competences to directly manage electricity distribution – a move aimed at ensuring sustainability, expanding access and reducing costs for end users.
“This transition is not just a change in management, it is a crucial step in advancing Uganda’s second generation power sector reforms, by returning control of the electricity distribution network to UEDCL, We are addressing key priorities including ensuring sustainability, expanding access to underserved regions and consolidating the distribution system in line with the Energy policy.” Bateebe stated.
The Electricity Regulatory Authority (ERA) also reaffirmed its commitment to ensuring a conducive regulatory environment that fosters investment, innovation, and consumer protection.
Eng. Ziria Tibalwa, chief executive of ERA, praised Umeme’s contributions but underscored the need for continued improvements in service delivery. “As Umeme relinquishes control of the electricity distribution assets today, we are undoubtedly appreciative of their service to Uganda over the last 20 years,” she said.
“ERA remains committed to creating a regulatory environment that fosters investment, innovation, and consumer protection.”
UEDCL has been steadily growing its footprint in Uganda’s electricity sector.
Over the past two decades, the company has taken over five electricity distribution concessions, including Ferdisult Engineering Limited (2017), Bundibugyo Energy Cooperative Society (2021), Pader Abim Community Multi-Purpose Energy Society (2023), Kyegegwa Rural Energy Cooperative Society Limited (2024), and Kilembe Investments Limited (2024).
Umeme is now the sixth concession under UEDCL’s control, solidifying the company’s role in Uganda’s electricity distribution landscape.
Umeme’s Managing Director, Selestino Babungi, reflected on the company’s impact over the past two decades.
“Actually, this year, considering what we have been working with from the first quarter, Umeme is a $700 million revenue business, growing at an average of 10% annually,” he said. “That’s what we are handing over, and we believe that should be protected because it goes on to attract investments upstream, downstream, and in regeneration.”
Babungi also expressed concerns about the rising demand for electricity, cautioning that if no interventions are made in the next three years, Uganda may experience a power shortage.
He suggested that Uganda explore regional power trade through the East African Power Pool (EAPP) to import electricity from Ethiopia and other neighbouring countries as a stopgap measure.
Under UMEME’s management, the electricity customer base expanded from 292,000 in 2005 to 2.3 million in 2024.
Technical and commercial losses were significantly reduced from 33% in 2005 to 16% in 2024, while revenue collections consistently exceeded targets in recent years.
UEDCL’s Managing Director, Paul Mwesigwa, outlined the company’s five key operational pillars: connecting the customer, making power available, managing energy losses, collecting the cash, and promoting safety.
Mwesigwa emphasized that these principles have helped UEDCL emerge as a trusted government utility, poised to transform Uganda’s power distribution landscape.
As UEDCL takes full control of Uganda’s electricity distribution, the focus is on improving network infrastructure, enhancing service delivery, and ensuring that electricity reaches more Ugandans efficiently.
With the government’s financial backing and regulatory oversight, the transition is expected to usher in a more sustainable and reliable power distribution system for the country while also keeping the profits Umeme has been generating within the economy instead of transfer the money abroad .
While Umeme exits the scene, its legacy of expanding access and reducing losses serves as a foundation upon which UEDCL must build. The challenge now lies in maintaining the momentum and ensuring that Uganda’s growing electricity demand is met with efficient and sustainable distribution strategies.
Mwesigwa explained that during this transition period ,UEDCL has been able to present itself as the trustable government of Uganda power utility that is going to turn around the power distribution space. With specific consideration on Umeme, GoU took the decision not to renew the Umeme concession in 2022.
This followed preparation on side of policy; three committees were formed and that is, the Inter-ministerial committee Chaired by the Honourable Shareholders and the Attorney General, the Joint technical committee chaired by the Permanent Secretary MEMD, and Retransfer cordinationation committee chaired by UEDCL MD and his counterpart at Umeme.
The retransfer coordination committee has been guided by the JTC approved roadmap which coincides with the Lease and assignment agreement; the associated risk matrix has been neutralised
. And I want to thank GoU, the Shareholders and financial partners for providing financial resources required to close this transaction for the Buyout amount and the CAPEX investment funds required to run the distribution business.
A staff structure of 2,712 employees has been put in place and buying electricity units and other services will remain uninterrupted through channels (MTN & Airtel), banks and other collection platforms.
In addition to the above, all electricity units pur chased by customers before Umeme’s exit shall remain valid even after Umeme’s exit. Hon. Minister and members, all offices previously run by Umeme Limited will remain open even after their exit.
Out of the 51 current service centres, 26 belong to UEDCL and they will organically revert to us as the landlord. For tthe rented offices, the respective landlords have been engaged to ensure continuity of service post Umeme
All cars, motorcycles, trucks, vans, SUVs, and other mobile equipment will all revert to UEDCL.
