KAMPALA, UGANDA – Uganda’s government has announced it will pay approximately $225m to power distributor Umeme to recoup its investments when its 20-year concession ends in March 2025.
The Electricity Regulatory Authority (ERA) said the exact payout amount will be determined by 31 March 2025, after reviewing Umeme’s investments.
Umeme’s concession, which began in 2005, will not be extended due to high electricity tariffs. Uganda Electricity Distribution Company Limited (UEDCL) will take over Umeme’s operations on 1 April 2025.
UEDCL has applied for licenses to distribute and supply electricity across the country, excluding Kalangala and West Nile, which are under private operators.
“We have reviewed and assessed UEDCL’s readiness to take over Umeme’s operations,” ERA CEO Eng. Ziria Tibalwa Waako said during a public hearing in Kampala.
“UEDCL has accumulated experience from taking over five private concessions and has expanded its operations to 102 districts.”
UEDCL Managing Director Paul Mwesigwa expressed confidence in the company’s capability to take over Umeme’s operations.
“Over the past 10 years, UEDCL’s business operations have increased from 4 districts in 2014 to 102 districts in 2024. The network operated is now 22,703 km; revenue has grown from sh 36.1 billion in 2014 to sh 100 billion in 2024; while the customer numbers have grown from 5,640 in 2014 to 213,330 as of September 2024,” he said.
UEDCL has requested ERA to approve an estimated revenue requirement of Uganda sh 4.02 trillion over the next three years to finance operational and capital costs.
The Ugandan government has faced criticism for high electricity tariffs, with many calling for reforms.
The handover of Umeme’s operations to UEDCL marks a significant shift in Uganda’s energy sector.
UEDCL’s takeover includes the operations of Pader Abim Community Multipurpose Electric Cooperative Society (PACMECS), Kyegegwa Electricity Cooperative Society, and Kilembe Investments Limited (KIL).
ERA has assessed UEDCL’s readiness for the takeover, reviewing private agreements, regulations, and the Electricity Act.
The new license will incorporate new service territories covering the entire country.
