What you need to know:
- Electricity sales from Isimba and Namanve thermal plant saw UEGCL’s revenues grow by 24 percent for the period ended June 2022
Uganda Electricity Generation Company Limited (UEGCL) posted a 24 percent or Shs210.9b revenue growth in the period ended June 2022, up from Shs169.b registered in the same period last year plagued by back-to-back Covid-19 lockdowns.
The growth, according to UEGCL’s financials released yesterday, was mainly due to an increase in sales of electricity from the 183MW Isimba in Kayunga District, and the 50MW Namanve thermal plant, which UEGCL repossessed in February from Jacobsen Elktro. The two plants generated Shs169b
The Namanve thermal plant is ideally a standby generation source, but anytime is permitted by Electricity Regulatory Authority to supply 7MW.
The positive cash flow enabled UEGCL to remit Shs129.8b on the Shs1.7 trillion ($482m) preferential export buyer’s loan acquired from Exim Bank for the project.
The dam, whose construction commenced in April 2015 and was commissioned in March 2019, cost Shs2 trillion, of which government contributed $86m (Shs312b). “We collect what we can from power sales and the balance comes from the Treasury,” Dr Harrison Mutikanga, the UEGCL chief executive officer, told Monitor when asked about low uptake of power from Isimba.
“Instead of using capacity charge - based on the highest amount of energy you are estimated to use or consume during a month - we now base on energy sales - how much is actually consumed. The issue here is [low] demand,” he said, hinting that the same approach will apply when the 600MW Karuma dam comes on board.
It had been expected that the first 100MW of the dam would be switched on by June or latest October, but the timeline was beset by electro-mechanical issues, which required fixing.
During the period UEGCL remained profitable with a net profit of Shs27.9b, cushioned against foreign exchange losses, given that its dollar-denominated loans were converted to shillings.
“The conversion was a major milestone for us. We are now shielded from the volatility of the foreign exchange rate, and its impact on our bottom line,” the financial report indicated.
UEGCL’s shareholders are ministries of Energy and Finance.
Defects Liability Period for Isimba
During the period, shareholders equity grew by 3.36 percent from Shs832b to Shs860b, while assets increased by 4 percent to Shs7.24 trillion on account of repossession of the Namanve thermal plant previously operated by Jacobsen.
Mr Amos Lugolobi, the State Minister for Planning, said UEGCL remains a liquid company but still needs buttressing from the Treasury to service loans due to Karuma and Isimba dams, noting that: “If Karuma had come on board the profit margins would have been much higher.”
Meanwhile, Energy Minister Ruth Nankabirwa revealed that shareholders had resolved not to extend the Defects Liability Period (DLP) when it expires next year in March for the Isimba dam contractor - China International Water and Electric Corporation.
“We are anxious to see that the defects are done away with, but we will not extend the DLP. However the contractor will continue working on the defects until we are satisfied,” she said.