Kampala, Uganda | ISAAC KHISA | State-owned Uganda Electricity Generation Company has maintained a growth trajectory in its annual performance with the latest financial results indicating a 24 per cent growth in income to Shs 210.9billion for the year ended June.30.
The company attributes increase in income to a surge in sales of electricity generated from the 183MW Isimba Hydropower Plant and the 50 MW heavy fuel oil-fired Namanve Thermal Power Plant and concession fees.
But UEGCL’S net profit declined by 70 per cent to Shs27.9 billion due to the absence of foreign exchange gain on the Isimba Hydropower Power Dam loan repayment plan because of the conversion to local currency effective July last year.
“This time around, the profit did not include any foreign exchange volatility factors, as the UEGCL dollar-denominated loans were converted to Uganda Shillings,” said UEGCL Chief Executive Officer, Harrison Mutikanga, during the Annual General Meeting, held at the Kampala Serena Hotel on Dec.20.
“The conversion was a major milestone for us, as a company, since we are now shielded from the volatility of the foreign exchange rate, and its impact on our bottom line.”
Mutikanga said UEGCL was also able to service its debt obligations on Isimba hydropower dam to the tune of Shs129.8 billion to the China Export-Import Bank.
UEGCL ‘s debt obligation ballooned from 532 billion in 2015 to Shs 5.9 trillion in FY2022 due to the loans borrowed for Karuma and Isimba hydropower dams.
The company’s assets increased by 4% to Shs 7.24 trillion due to the acquisition of the 50 MW Namanve Thermal Power Plant as the installed electricity capacity increased from 563MW to 613MW during the same period under review.
UEGCL Board Chairperson, Proscovia Njuki, said whereas the COVID-19 pandemic has fundamentally changed the business environment, the company has to constantly anticipate, adjust, adapt and strategise to minimize the impact.
She said UEGCL remains focused on executing its business resilience strategy centred on four strategic drivers: diversification, technology improvement & innovation and research, and cost & operational efficiency and improved organizational effectiveness, to grow and maximise long-term value creation for its Stakeholders.
“Moving forward, the Board is confident of delivering sustainable growth and building a stable earnings stream,” she said.
“We are very optimistic that the company will continue to grow despite the challenges in the operating environment which are likely to persist in the short and medium term.”
Njuki said the company will next year focus on commissioning and commencement of commercial operations of the 600MW Karuma Hydropower Project which will add 600MW of electricity to the national grid as well as the takeover of possession and commercial operations of the Nalubaale and Kiira Hydropower plants effective April 2023 following the expiry of the 20-year concession and Assignment Agreement with Eskom (U) Limited. The construction of Karuma hydropower dam is at 99.60% completion.
She said UEGCL plans to refurbish the ageing dam structures at the Nalubaale and Kiira Hydropower plants to ensure the posterity of the assets to meet future power needs at reasonable tariffs.
Njuki revealed that the electricity generation company also plans to work towards ISO accreditation for 45001 for Occupational Safety and Health and 14001 for Environment through the company’s established Safety, Health, Environment and Quality (SHEQ) function dedicated to handling all safety and environmental issues.
“The completion of the construction of the Nyagak III Hydropower Project and commencement of commercial operations will also be on our radar,” she said. Also in attendance during the AGM included Minister for Energy and Mineral Development, Ruth Nankabirwa and Minister for Finance, Amos Lugoloobi.