Uganda Electricity Distribution Company Limited (UEDCL) has been granted a license to distribute and sell electricity in Uganda, taking over Umeme Limited, which has been doing the job for over two decades.
In 2022, the government informed Umeme that its 20-year concession would not be extended beyond its expiration in March 2025.
President Museveni has fiercely criticized Umeme over high electricity tariffs, which is one of the reasons for ending the concession.
UEDCL, which will formally take over Umeme’s operations on April 1, 2025, had to apply for a license for distribution and sale of electricity in Uganda pursuant to Section 29 of the Electricity Act of 1999.
In accordance with regulation 18, section two of the electricity application for permits, licenses, and the tariff review regulations of 2007, UEDCL submitted various applications to the power regulator, the Electricity Regulatory Authority (ERA), to be granted a license to take over Umeme operations.
“We received an application for a license to distribute electricity in Uganda, we received an application for a license to sell or supply electricity in Uganda, and we received an application for tariff performance parameters. These performance parameters, among others, included the overall distribution loss factor. It included the distribution, operation, and maintenance costs. It included the day’s lag, the target uncollected debt factor, the minimum new customer connection targets, and the minimum standards of reliability and quality of supply,” said ERA Board Chairperson Sarah Wasagali Kanaabi.
ERA undertook the necessary review process for UEDCL submissions, including consultations with the key stakeholders, who included the Ministry of Energy and Mineral Development, the Ministry of Finance, Planning and Economic Development, the Ministry of Justice and Constitutional Affairs, Umeme Limited, licensed companies operating in the generation, transmission, and distribution segments, among other stakeholders.
In accordance with Section 10 of the Electricity Act as amended, the ERA at its 420th meeting considered and determined the UEDCL application.
“The Authority at this 420th meeting received and resolved to approve the award of the license for distribution and sale of electricity for the national main grid in Uganda to UEDCL. As a regulator, we now embark on the journey for monitoring and enforcement of compliance with the licensed terms and conditions to ensure sustained, efficient service delivery for social economic transformation of Uganda,” Kanaabi.
Today, Tuesday, December 31, 2024, the Minister of Energy and Mineral Development, Ruth Nankabirwa, presided over the formal handover of a license for the distribution and sale of electricity on the national grid to Uganda Electricity Distribution Company Limited.
Nankabirwa assured Ugandans that the government remains fully committed to the continuity of electricity services during this critical period.
The government’s top priorities, she said, include affordability, electricity access, and quality and reliable electricity.
“The existing tariff packages as approved by ERA, such as the lifeline tariff, declining block tariffs, and time-of-use tariff arrangements, will remain operational,” Nankabirwa said.
She added that the regulator will oversee projects that expand or rehabilitate infrastructure, including substations, transformers, lines, and poles, to mitigate service interruptions.
She applauded Umeme for “commendable” work in loss reduction, improved revenue collection, infrastructure development, system improvement, and advancing electricity access during its tenure.
“Umeme performed well when it comes to loss reduction, comparing from where they found us; I think it was beyond 38% to now where we are at about 15% power loss reduction. And power loss reduction involves investment in the system to make sure that you have a quality system. There was also improved revenue collection. People used to steal so much. The stealing is still there, but because of the introduction of the prepaid meter, that technology has helped us reduce the theft. So, we applaud Umeme. We shall also continue to make sure that every individual who is consuming Uganda’s electricity pays. We started on this by amending the 1999 Electricity Act, and we introduced stringent penalties for those who vandalize and those who steal power. We will continue monitoring, and those that we shall get will serve as examples,” she said.
Nankabirwa called upon all Ugandans to protect the electricity infrastructure, fulfill their obligations by paying for electricity services, and refrain from power theft and/or vandalizing electricity infrastructure—practices that undermine government efforts to provide a reliable power supply.
To ensure a smooth workforce transition, Nankabirwa announced that the government has set the post-Umeme Limited organizational structure with a total of 2712 employment openings exclusively for UEDCL and Umeme employees, in line with the Lease and Assignment Agreement for a seamless asset retransfer.
“These jobs have been availed for you who are already working at UEDCL and Umeme Limited to ensure the continuity of the electricity service without disruptions,” she said.
The UEDCL Board is responsible for the recruitment of staff.
Nankabirwa encouraged all eligible employees of the UEDCL and Umeme to express interest and/or apply for the positions matching their qualifications and experience once advertised in the near future.
I urge all staff to remain calm and committed to their duties—keep the lights on, manage energy losses responsibly, and uphold professional conduct to safeguard your career prospects.
On matters of the buyout amount, Nankabirwa said that the Office of the Auditor General is progressing well in the study to determine the buyout in accordance with the Lease and Assignment Agreement.
She added that the Ministry of Finance, Planning, and Economic Development has committed to providing the buyout amount on time for a seamless transition. Presentation of Licenses
In October this year, ERA said that the total amount of money that the government will pay out to Umeme to recoup its investments will be determined on March 31, 2025.
