Firms cut power over government debts

Kampala

Ugandans should brace for 24 hours of load-shedding starting today, as government runs out of money to pay for power generated by private electricity companies. The country’s sole electricity power supplier Umeme Limited yesterday announced the resumption of load-shedding, starting 6am to 6pm during day and from 6pm to 6am in the night.

In a text message to consumers, Umeme said, “Dear customer, we regret to inform you that UETCL has informed us of a generation shortfall of 50MW day and 120MW peak resulting into both day and night emergency load-shedding.”

In an interview yesterday, Mr Issa Ssekitto, the spokesman of Kampala City Traders Association, said the new round of loadshedding was bound to cripple business in Uganda. He said the power cuts just like the depreciating shilling against the dollar will culminate in today’s strike by the traders.

Umeme, however, said the situation is temporary and advised consumers to make use of power when available. Power producer Aggreko switched off 50megawatts based at Kiira, in Jinja while Electro-maxx Ltd switched off 22 megawatts based in Tororo District. Jacobsen Ltd is expected to shut down its 50-MW plant in Namanve today, drastically cutting electricity supply to the national grid.

Emergency power cut
“This shortfall means that the amount of electricity that Umeme receives for distribution is greatly reduced thus prompting emergency load shedding to regulate the distribution of power,” said Mr Sam Zimbe, Umeme’s general manager.

Mr Eriasi Kiyemba, the chief executive officer of UETCL, yesterday said the Independent Power Producers (IPPs), cut off supply to government due to non-payment of arrears totalling Shs200 billion. “This is what we are requesting from government as arrears for March to June. Generators cannot buy fuel from their suppliers because they cannot pay them,” he told Daily Monitor in an interview.

Mr Kiyemba said the IPPs without good financial backup are under pressure to stop generating power.
The power transmission company, which is the sole buyer of power in Uganda, said the IPPs are demanding that the government first settles the arrears for March and April amounting to Shs92 billion and pay the balance within the next three months. IPPs contribute 40 per cent of the electricity consumed in Uganda and other power demand is met by hydropower generated from Nalubaale (180MW) and Kiira (200MW) power stations.

However, the combined megawatts generated by the two stations have drastically reduced to 185mw due to drought. According to Umeme, now there is a shortage of 120MW during peak time and 50MW during day, resulting in both day and night load shedding.

Last week, Parliament blocked a request by government for additional Shs92 billion to pay for power. In April, Parliament approved Shs92 billion to pay for power. Government said this was used to settle power debts for January and February. The request was part of Shs61.3 billion supplementary budget requested for by Finance State Minister Fred Omach.

Government currently pays about Shs50 billion per month to subsidise the cost of power. The power subsidies have risen from Shs8 billion per month in 2007, to Shs50 billion this year. UETCL attributes the rise to in fuel prices to the shilling that is depreciating against the dollar. “We sell the energy in shillings but buy in dollars,” said Mr Kiyemba.

The shilling has lost ground to the dollar by over Shs600, standing at Shs2,530 per dollar. For government to maintain power tariff at the current level, government must give UETCL Shs488 billion in subsidies.