The Uganda Electricity Distribution Company Limited (UEDCL) is set to spend UGX 43.3 billion (USD 118 million) over the next nine months to support its operations, following the exit of Umeme from electricity distribution.
This was revealed by Ziria Tibalwa Waako, Executive Director of the Electricity Regulatory Authority (ERA), during the second edition of the Electricity Sector Bazaar held on Tuesday.
According to Waako, the funds were part of the Umeme buyout package and will now be recovered through electricity tariffs, with UEDCL using the money as seed capital to stabilize operations.
“The Cabinet’s decision was that the USD 118 million paid to Umeme as a buyout should be given to UEDCL to recover through the tariff—with interest—and invest as seed capital,” she explained.
She noted that this financial support places UEDCL in a strong position to continue service delivery, with USD 100 million available for use over the next nine months.
“ERA has made provisions in the tariff to support UEDCL, just like it did for Umeme. In fact, UEDCL has at its disposal more money than Umeme had in any particular year,” she added.
Waako said the funds will be used to restore, upgrade, and maintain the power network, ensuring it is efficient and resilient. She also emphasized that UEDCL is expected to be self-sustaining, with operations modeled similarly to Umeme’s.
Additional Support from the World Bank
In addition to the USD 118 million, UEDCL will benefit from the World Bank’s Electricity Access Scale-Up Project, which is providing USD 683 million. This initiative focuses on expanding access to renewable energy in rural areas, especially for public institutions such as schools, hospitals, and health centers.
“This includes customers who require no pole or just one pole to connect to the grid,” Waako explained. “We’re working toward universal electricity access by 2030.”
Performance Targets and Loss Reduction Goals
UEDCL has been given clear performance targets, especially in reducing electricity losses and improving revenue collection:
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Loss target:
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14.59% in the next 9 months
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13.65% in 2026
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13.31% in 2027
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Revenue collection:
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99.85% and slightly increasing each year due to the prepayment model
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To further ensure prompt payment and reduce arrears, government agencies will also be shifted to prepaid metering, similar to regular consumers.
“We’ve already discussed this with the Permanent Secretary and Secretary to the Treasury (PSST), and he is in agreement,” Waako noted.
Umeme’s Exit and UEDCL’s Readiness
As of Umeme’s exit on April 1, 2025, electricity losses stood at 16%, with a 99% revenue collection rate, totaling UGX 2.5 trillion. Umeme had over 2 million connections, adding around 100,000 new users annually, monetizing 84% of energy received from UETCL.
Despite Umeme’s broader presence, Eng. Protaze Tibyakinura, UEDCL’s Chief Engineering and Technical Services Officer, said UEDCL has been operating in the most challenging regions, serving 240,000 customers, all on prepaid meters.
“We’ve learned valuable lessons from these difficult areas, and we’re ready to take on this national mandate,” he affirmed.
Since taking over, UEDCL has focused on restoring damaged infrastructure, connecting users who had already been certified by Umeme, and addressing widespread outages experienced during the transition.
“For April, our priority has been restoring service and connecting certified new customers—at no extra cost,” Tibyakinura confirmed.
