Electricity distributor, Umeme is set to receive a $25 million loan from the International Finance Corporation (IFC) to fund the expansion and upgrade of its distribution network.
This is second time that the electricity utility firm is receiving a loan from the world’s financial institution after it received $70million in 2013 to support its 2013-2017 rehabilitation plan.
The four-year capital expenditure plan mainly involves the upgrade and expansion of medium voltage transmission lines and substations as well as the introduction of pre-paid meters across its customer base.
“IFC is now proposing to increase its commitment to finance this program by an additional debt financing of $25m,” the agency, which is the World Bank’s private lending arm, said.
Umeme, which is cross-listed in Kenya and Uganda, holds a 20-year concession from 2004 for distribution of electricity in Uganda. The $25 million from IFC will constitute half of the amount Umeme is seeking for expansion with the other half to be sourced from other banks.
The capital expenditure is expected to help the company handle more power with Uganda planning to increase its electricity generating capacity to at least 1,500 mw in the next three years from 830MW.