The Independent Uganda: You get the Truth we Pay the Price
The company eyes to connect 225,000 new customers over the next eight months through its 100 service centers
Kampala, Uganda | JULIUS BUSINGE | State-owned Uganda Electricity Distribution Company Limited (UEDCL) is investing Shs267.5 billion ($74 million) to refurbish electricity lines, install over 518 transformers, and construct new substations in a bid to strengthen its distribution network and meet rising national demand.
The capital investment plan, approved by the Electricity Regulatory Authority (ERA) for implementation in 2025, marks a significant step forward for UEDCL, which assumed operational control of the country’s electricity distribution network nearly two months ago.
The utility took over from Umeme Ltd following the expiry of its 20-year concession at the end of March this year.
UEDCL’s Managing Director, Paul Mwesigwa, said the utility is focused on long-term improvement and resilience, and urged the public to support the transformation journey.
“We are scaling up investments to improve power reliability and ensure every Ugandan household and business can access safe, affordable, and sustainable electricity,” he said.
Transformers replaced
Since Umeme take-over, UEDCL has replaced all 116 faulty transformers inherited in April—ranging from 25kVA to 1MVA—substantially improving power reliability across multiple regions.
The company has also begun nationwide planned shutdowns to facilitate infrastructure upgrades, working closely with state-owned Uganda Electricity Transmission Company Limited (UETCL) on major substation works at Mutundwe, Namanve, Kawanda, Nkenda, and Mbarara North.
Meanwhile, efforts to expand access to electricity are well underway. UEDCL has set a target of connecting up to 225,000 new customers over the next eight months through its 100 service centers across the country. New connections—particularly for three-phase and no-pole households—began in mid-April, supported by a fully digitized application system and a stocked inventory of meters.
As part of its rapid operational rollout, the utility has already onboarded 96% of its workforce, with recruitment of the remaining 4% ongoing. Staff are undergoing intensive training at the Njeru training centre, including cultural integration and change management to align with UEDCL’s service ethos and strategic goals.
Customer service has also been upgraded, with UEDCL launching 24/7 contact centers and expanding its digital presence to enhance responsiveness and engagement.
Vandalism remains a headache
Despite this early progress, UEDCL faces mounting challenges, particularly vandalism and illegal electricity connections. Over the past month, nine cases of vandalism were reported in Nakasongola and Luwero alone, with additional incidents in Mityana and Mukono. The company revealed that it is working with law enforcement agencies and urging communities to report vandalism through toll-free numbers, local leaders, and media channels.
The company said community engagement is also another strategy. The utility has launched local baraza meetings in areas such as Wabigalo, Kakoge, Katugo, and Nakasongola to explain its plans and build grassroots support.
UEDCL formally took over distribution operations on December 31, 2024, as part of a government-led plan to integrate generation, transmission, and distribution functions under state control. The transition followed Cabinet and ERA approval, and is expected to promote greater accountability and long-term sector sustainability.
To facilitate the transfer, Parliament approved a $190 million loan from Stanbic Bank in March to compensate Umeme for unrecovered capital investments. UEDCL is also raising $255 million to fund the buyout and an additional $210 million for infrastructure expansion—bringing the total financing package to $465 million.
During its two decades of operations, Umeme reduced energy losses from 38% in 2005 to 16.2% by 2023. However, it struggled with aging infrastructure, regulatory disputes, and public criticism over rising tariffs—challenges UEDCL will now have to navigate.
Experts note that operational efficiency, robust infrastructure, and clear dispute resolution mechanisms—hallmarks of Umeme’s tenure—will be key to UEDCL’s success.
As Uganda moves forward with its industrialization, manufacturing, and rural electrification ambitions, a stable and efficiently managed electricity distribution network will be vital. The government is counting on UEDCL’s revamped strategy to reduce outages, cut technical losses, and support Uganda’s wider development agenda.
“Reliable power is not just a utility service—it’s the backbone of economic transformation,” said Mwesigwa.
“We are committed to building a distribution network that delivers power where and when it is needed, and to making sure that progress reaches every Ugandan household and business.”
Umeme vs gov’t dispute
Meanwhile, Umeme said it will pursue international arbitration in London to recover $292 million (Shs1.1 trillion) it claims is owed by the Ugandan government following the end of its 20-year electricity distribution concession.
The company announced its intention in a public notice on Monday, June 2, after talks with the government failed to resolve what it described as a “significant financial disparity” in the final settlement.
Umeme said it was “dissatisfied” with the $118 million (Shs426.5 billion) buyout payment made so far and would now seek full recovery of the balance through arbitration, in accordance with provisions in the original concession agreements.
“Despite our best efforts in good faith negotiations, a mutual agreement on the full and fair value of our investments could not be reached,” the company said. “We believe arbitration is the necessary next step to ensure our shareholders’ interests are protected and all outstanding sums are recovered.”
The Office of the Auditor General is currently reviewing Umeme’s 2025 investment claims, which could potentially reduce the disputed amount if admitted and cleared. However, with no full resolution in place, Umeme’s board has resolved to initiate formal proceedings in London.
The arbitration dispute reference is expected to be served to the government in the coming days. The dispute has also delayed Umeme’s financial reporting. The company has requested a further extension from the Uganda Securities Exchange to publish its 2024 financial results, now due by June 12, 2025.
The ongoing reconciliation process and unresolved compensation issues have led to a continued suspension of trading in Umeme’s shares on the local bourse until that date.
