We are winding up our operations, Eskom says

To return. Eskom will formally return Nalubaale power dam to government after its 20-year concession expires in March next year. PHOTO | FILE 

What you need to know:

  • Government says it has already notified Eskom that it will have to handover Nalubaale power dam after expiry of its 20-year concession in March next year.

South African power company Eskom has said it has started the process of handing over Nalubaale power dam assets back to government.

Speaking to journalists after a public hearing and stakeholder engagement for the 2022/23 electricity tariffs last week, Ms Thozama Gangi, the Eskom chief executive officer, said currently, the Auditor General is verifying capital investment that the company has injected into the 20-year concession government gave it to operate and maintain Nalubaale hydro power dam.

Eskom was concessioned the dam in 2003 to operate it on behalf of Uganda Electricity Generation Company Limited (UEGCL).

It had been charged with maintaining and upgrading the dam with the aim of stabilising electricity production in Uganda.

“We are leaving a better plant than we found. We came to stabilise electricity production and build capacity in the sector and government supported us. We have tried our best to deliver our mandate,” she said.

Ms Gangi also noted that Eskom had received $59m from its investors as equity to invest in Nalubaale Hydro power station, of which, investments worth $52m have been completed while another $3m will be deployed before end of the concession to upgrade equipment, train human resource, build maternity wards for the community in Kimaka, renovate Njeru Primary School for children of workers at the dam and plant trees on Wanyange Hill, among others.

However, she noted much of the investment has since been recovered, save for $18m that the Auditor General is currently verifying.

The money is expected to be paid by government before Eskom exits in March next year.

Government at the weekend indicated that in October, it had made a decision to take back the electricity sub-sector as a way of availing affordable electricity to Ugandans.

The move will also affect Umeme, whose 20-year concession is due to expire in 2025.

Last week Energy officials indicated that government would appoint a committee to audit Umeme investments with the view of ascertaining the amount of money it would need to execute the buyout.

Government has also indicated it will not renew any concession in the electricity sub-sector with many of them expected to runout soon.

In February, Jacobsen handed over the Namanve Thermal Power Plant back to government after expiry of the 13-year build, own, operate concession.  

At the weekend the Ministry of Energy indicated it had commenced the implementation of the power sector reforms, which will culminate into creation of the Uganda National Electricity Company Limited as a state-run entity with majority shareholding under a Public Private Partnership arrangement as a possible option.  

Speaking at the same engagement, Dr Sarah Wasagali Kanaabi, the Electricity Regulatory Authority chairperson, said Eskom had done a good job by prudently managing Uganda’s oldest hydro power dam.

“Eskom is left with a few months but we commend you for a job well done. You prudently managed the oldest facility, which made [us] comfortable,” she said.


Planned activities

During the same meeting, companies in the electricity subsector submitted their activity plans. UEGCL presented a budget of Shs52b for infrastructure while Uganda Electricity Transmission Company Limited presented a three-year budget of Shs3.6 trillion. Uganda electricity Distribution Company Limited presented a budget of Shs.42.9b for business growth and sustainability, while Umeme, whose concession expires in 2025 presented a Shs650b to improve the network.

Companies are by law expected to present their activities to the regulator, which are scrutinized before they are given a go ahead.