The Ugandan government is actively working on a smooth transition as the concession for the power distributor, Umeme, is scheduled to conclude in March 2025. Umeme, which has played a prominent role in the country’s power distribution for the last 19 years, is known for introducing Yaka prepaid meters. The Minister of Energy, Ruth Nankabirwa, has confirmed that preparations for Umeme’s exit are underway, and structures are being established to facilitate the handover.
As of March 2025, after 20 years of operation, Umeme’s concession agreement will naturally come to an end. Minister Nankabirwa has initiated the process of reverting the concession to the Uganda Electricity Distribution Company Limited (UEDCL). To oversee and manage the transition, a Joint Technical Committee (JTC) has been formed, consisting of key stakeholders, including the Ministry of Energy, Uganda Electricity Distribution Company Limited, and the Electricity Regulatory Authority (ERA).
The Joint Technical Committee is tasked with ensuring a seamless handover as Umeme exits and hands over to UEDCL by April 1, 2023. Efforts are underway to support UEDCL in preparing to take over Umeme’s operations. The government is reportedly capitalizing UEDCL with sixty-four million dollars for operational costs and potential absorption of Umeme employees.
Umeme, listed on the Uganda Securities Exchange, has been a significant player in the country’s power sector. The government has considered acquiring a majority share of Umeme, with discussions suggesting a potential buyout amount between $200-225 million. The final amount will be determined by the Auditor General, considering Umeme’s unrecovered investment costs.
Umeme’s departure poses challenges for the power distribution landscape, as it has been responsible for maintaining over 44,000 kilometers of distribution lines and serving approximately 1.9 million customers. Despite attempts to extend the concession, disagreements over the return on investment charged by Umeme led to the government’s decision to let the concession conclude in 2025.
However, there is a possibility of Umeme returning to the sector after 2025. Cabinet proposals suggest the creation of a special purpose vehicle, comprising UEDCL and a private investor, potentially Umeme, to run the concession. While the selection is not automatic, Umeme’s experience and established structures across the country may position it favorably.
The transition process marks the end of an era for Umeme in Uganda’s electricity sector, prompting discussions on the future of power distribution and private sector involvement.
About time they left. They are not doing anything useful anyway