Govt takes over electricity sale, distribution from Umeme

KAMPALA - The government has officially transferred licenses for electricity distribution and sale to the Uganda Electricity Distribution Company Ltd (UEDCL), concluding a 20-year partnership with Umeme, a private distributor criticised for high costs that burdened ordinary Ugandans, according to the Minister of Energy and Mineral Development, Ruth Nankabirwa Ssentamu.

“This ends a 20-year concession which expires on March 31, 2025. To ensure a seamless transition, the government has officially handed over the licenses for the distribution and sale of electricity in Uganda to EEDCL following a streamlined application that was considered by the Uganda Regulatory Authority before a decision was finalised,” Nankabirwa said.

While addressing the press at Uganda Media Centre in Kampala on Tuesday, December 31, 2024, Nankabirwa said that UMEME’s licenses were revoked following President Yoweri Museveni’s intervention to bring down the cost of power tariffs that were affecting local citizens who have since resorted to using charcoal for home energy and electricity to power industries.

“There have been unbearable power cuts and load shedding in the country. Umeme has been offering us a high return of 20% on investment as a government and this has been too high. Much as it performed highly on loss reduction from 38% to 15% of power loss, affordability of power on existing tariffs has been a thorn in the side of the ordinary person’s flesh,” she said.

To ensure a smooth workforce transition, the government has set the post-UMEME Limited organisational structure with a total of 2,712 employment openings exclusively for UEDCL and Umeme in line with the lease and assignment agreement for seamless asset retransfer, Nankabirwa promised.

The Minister of Energy and Mineral Development, Ruth Nankabirwa hands over new contracts to Francis Tumuhirwe, the Chairman UEDCL, ending the UMEME monopoly. (Credit: Isaac Nuwagaba)

The government's takeover of Umeme's operations is part of its efforts to rationalise public services and phase out private sector concessions. The Electricity Regulatory Authority (ERA) has been working closely with UEDCL and Umeme to ensure a smooth transition.

Eng. Ziria Tibalwa Waako, the Chief Executive Officer of ERA, said that they shall keep collaborating with the Ministry of Energy, UMEME Ltd, and the UEDCL leadership to ensure a smooth, transparent, and coordinated process that prioritises staff interests while maintaining uninterrupted service delivery.

“As part of the transition, all staff will receive new terms of employment aligned with the approved framework for operations post-March 2025. Particularly in the initial months following the retransfer of the distribution network to the government represented by UEDCL,” added Waako.

To date, the government has witnessed transitions from private companies to the government, including Ferdsult Engineering Services to UEDCL; Pader-Abim Community Multi-purpose Electricity Cooperative Society Limited (PACMECS) to UEDCL; Bundibugyo Energy Cooperative Society (BECS) to UEDCL; Kyegegwa Rural Electricity Cooperative Society (KRECS) to UEDCL; Kilembe Investments Limited (KIL) to UEDCL; Jacobsen Uganda Power Plant Company Ltd to UEDCL; and Escom Uganda Ltd to UEDCL.

According to Waako, the country’s generation capacity has reached 2,049MW, boosted by the commissioning of a 600MW Karuma Hydropower Plant and other smaller plants.
Francis Tumuhirwe, the chairman of UEDCL, reassured the public of a seamless transition, highlighting its readiness to take overUmeme's operations.

“The company plans to expand its network and staffing and shall absorb 2,415 Umeme staff to maintain efficient service delivery,” he said.

“We promise that the government shall keep growing its connection numbers to over 400,000 people enrolled on the national grid, with new 35,000 connections per month done to improve electricity access,” Tumuhirwe assured.

As outlined in Vision 2040 and the National Electrification Strategy, UEDCL aims to achieve universal access by 2030 using both on-grid and off-grid solutions through the implementation of the Electricity Access Scale-up Project (EASP).