As Uganda moves closer to reclaiming its electricity distribution network from Umeme Limited, the government has reaffirmed its preparedness to assume full control through the Uganda Electricity Distribution Company Limited (UEDCL) starting April 1, 2025.
Energy Minister Ruth Nankabirwa has assured the public of the government’s readiness, vowing to improve service quality, ensure a seamless transition, and address power reliability issues that have plagued consumers. The government is fully prepared to take over the Umeme concession through UEDCL by April 1, 2025. We are committed to improving service quality, ensuring a smooth transition, and addressing power reliability challenges, Nankabirwa emphasized.
Yet, behind the optimism, financial complications loom. The government plans to secure a Shs692.688 billion ($190 million) loan from Stanbic Bank Uganda to buy out Umeme, but the Auditor General’s office has flagged concerns over the accuracy of the figures submitted by the electricity distributor.
Joseph Hirya, Director of Audit in the Office of the Auditor General, has advised Parliament to delay approving the loan until Umeme’s financial claims undergo a thorough review. We request a few more days, not beyond March 28, 2025, so that we can provide the actual figures, Hirya told the Committee on National Economy. It is better to pay interest on the loan knowing that it is based on accurate figures.
With discrepancies in Umeme’s submissions yet to be resolved, the government risks securing a loan without fully verifying the financial obligations attached to the buyout. In addition to the Umeme buyout, the Ministry of Finance is finalizing a $50 million (Shs185 billion) internal borrowing plan to fund UEDCL’s initial capital investments. However, delays in disbursing these funds raise concerns about whether UEDCL will be financially equipped to handle the transition efficiently.
While the government insists UEDCL is prepared to take over, industry experts warn that the transition may not be as smooth as promised. Engineer Ziria Tibalwa, Chief Executive of the Electricity Regulatory Authority (ERA), has highlighted UEDCL’s financial constraints and lack of adequate investment in preparation for the takeover. We aren’t even ready with the $50 million for UEDCL to start, yet the concession agreement wouldn’t allow UEDCL to step in, Tibalwa told Parliament, emphasizing that early investments could have made the transition easier.
Beyond financial readiness, staffing remains another major concern. The Ministry of Energy has launched a restructuring plan to streamline UEDCL’s operations, eliminate redundancy, and ensure efficient electricity distribution. The government insists that recruitment has been transparent and merit-based, but doubts persist over whether UEDCL will have the capacity to match Umeme’s operational efficiency from day one.
The transition comes at a time when power outages across the country have intensified, raising fears that the shift from Umeme to UEDCL could further destabilize electricity distribution. Tibalwa attributes these outages to clauses in Umeme’s concession that prevent government intervention until the contract officially ends, leaving Ugandans frustrated over prolonged blackouts.
With just over a year until the takeover, Nankabirwa remains focused on securing Parliament’s approval for the loan and finalizing the buyout process before the March 31, 2025, deadline. The success or failure of this transition will not only shape Uganda’s electricity distribution but could also redefine public trust in government-run utilities.
As Uganda takes this bold step, the question remains: Will the government deliver on its promise of better electricity services, or will the transition lead to more power struggles both political and electrical?
