(FREETOWN) – Former Uganda electricity distributor Umeme is in final negotiations with the government of Sierra Leone for a 15 year concession to run the country’s electricity distribution network. Operations are targeted to begin by May 2027.
Sources close to the matter said negotiations to take over Electricity Distribution and Supply Authority’s distribution operations entered the final round at the end of July. Umeme managing director Selestino Babungi confirmed that the talks were at the tail end and that a formal announcement would be made once everything is concluded.
A recent review of Sierra Leone’s programme with the International Monetary Fund showed that the government and Umeme are targeting full operationalisation of the World Bank backed concession by the end of May 2027. Umeme has indicated that it could begin operations before the stipulated 24 month mobilisation period.
The deal would give Umeme a major new market less than two years after its 20 year electricity distribution concession in Uganda ended. During the company’s annual general meeting last year, Umeme chairman Patrick Bitature said Sierra Leone offered a strong opportunity as the company searched for business after the expiry of its Ugandan concession.
“The beauty of the Sierra Leone case is that if we go through, we don’t even need to put in much of our capital,” Bitature said.
He noted that the government of Sierra Leone and the World Bank had negotiated a financing package of about $100 million (UGX 365 billion) to support the early years of the concession. Umeme would only make additional investments where it chose to do so.
A World Bank Group spokesperson said the negotiations followed a process that began in February 2024, when the institution and other development partners started supporting Sierra Leone’s reforms to improve the Electricity Distribution and Supply Authority and attract a private sector operator.
The World Bank has supported the financing, recruitment and design of reforms intended to bring in a private operator under an operations and management concession.
“Virtual discussions have been held between the two parties on appropriate risk allocation and mitigation measures to ensure that the concession can achieve its intended goal of improving the utility performance,” the spokesperson said.
The government and development partners are now working to finalise the legal agreement ahead of signing, the spokesperson added. The concession will run for 15 years and include a 24 month mobilisation period.
Sierra Leone launched an expression of interest for the concession on August 28, 2024, attracting 11 applicants. Six companies were shortlisted after assessment of their technical, financial and general qualifications.
Requests for proposals were issued on March 21, 2025, followed by a pre bid conference and site visits in three provinces in May. When the final bids were submitted on August 8, 2025, Umeme was the only shortlisted company to submit a proposal.
Its bid was opened in the presence of the government evaluation committee and transaction adviser Deloitte Ghana. Umeme passed the technical evaluation conducted in September 2025, allowing it to proceed to financial evaluation. The Sierra Leonean government subsequently agreed to enter negotiations with Umeme.
Sources familiar with the process said one of the bidders, a European utility, withdrew over concession terms and the attractiveness of the market, particularly the high level of electricity losses. Other shortlisted firms included French, German and Italian companies.
The Sierra Leone concession comes with significant challenges. The Electricity Distribution and Supply Authority’s distribution system loses an estimated 40 to 46% of the electricity supplied to it. Technical losses account for about 26 to 30%, while commercial losses, including theft and illegal connections, account for roughly 14%.
Umeme is expected to introduce modern infrastructure and digital monitoring systems to bring total losses below 20%. This is an area in which Umeme has considerable experience. When it took over Uganda’s electricity distribution network in 2005, system losses stood at about 38%. The company reduced them to 16%, the lowest level recorded in Uganda.
Sierra Leone is hoping that Umeme can replicate some of that turnaround in a much smaller and more challenging market. Sierra Leone has about 300 megawatts of installed generation capacity, largely from hydro and thermal sources, and more than 270,000 electricity customers.
The country also faces a major mismatch between the cost of supplying electricity and what customers pay. Electricity generation costs about 14 US cents per kilowatt hour, but high distribution losses push the cost of supplying the average customer to about 28 cents. The average retail tariff is about 21 cents per kilowatt hour.
The gap is compounded by the depreciation of the Leone against the dollar because much of Sierra Leone’s electricity supply costs are dollar linked, while the Electricity Distribution and Supply Authority collects most of its revenue in local currency.
The 50MW Bumbuna hydroelectric plant has a dollar denominated operation and maintenance contract. Karpower’s 65MW floating thermal plant has a power purchase agreement with payments linked partly to global oil prices.
Sierra Leone also imports between 27MW and 50MW from Côte d’Ivoire through a regional power interconnector under a dollar denominated power purchase agreement.
The pressure is particularly severe in Freetown, which accounts for about 86% of the country’s centralised electricity supply. The distribution network is ageing, poorly maintained and not adequately sized for growing demand. During the dry season, demand often exceeds available supply, resulting in load shedding.
