Govt moves to merge three electricity agencies

Ms Eveline Anite, the State Minister for Investment and Privatisation

What you need to know:

The decision is aimed at streamlining operations and reducing power tariffs.

Government has moved to merge three electricity agencies to create a national power utility company that will generate, transmit and distribute electricity across the country.
The move to merge Uganda Electricity Generation Company, Uganda Electricity Transmission Company, and Uganda Electricity Distribution Company (UEDC) is aimed at streamlining their operations.

It follows constant cries of poor distribution and exorbitant costs Ugandans are subjected to access electricity.
The entities were created during the privatisation process after the government disbanded the then Uganda Electricity Board (UEB).
Insiders say the agencies have been struggling with poor management, high operational costs, and other anomalies.

While appearing before the Parliamentary Natural Resources Committee yesterday to defend the government position on the Electricity Amendment Bill 2021, Ms Eveline Anite, the State Minister for Investment and Privatisation, said the merging will create a company solely owned by the government.
She said the Ministry of Energy will own 51 percent shares, while 49 percent will be owned by the Finance ministry.

“Government’s position is that we have one power company, we actually more or less go back to a better version of UEB, where the utility is provided by the government,” Ms Anite said.
She said President Museveni directed that electricity be a preserve of the government after realising the increasing power bills.

Mr Museveni on Wednesday said he would engage the Speaker of Parliament to fast-track the amendment of the law to ensure that electricity goes directly from generation to the industrial consumer .
He said providing electricity through a third party increases tariffs, hampering industrialisation.
Data from Statista, a global markets and consumer data company based in Hamburg, Germany, in a research report for the first quarter of 2021 indicated that Uganda is one of the 10 African countries with the highest tariffs on the continent. 

Many countries on the list are those that have privatised their electricity distribution.
Ms Anite said Umeme is one of such entities.
“Umeme is doing the role of distribution and the President’s directive is that we should not have middlemen. The major key areas of industrialisation where consumption is high has been divided between UEDC and Umeme through concession,” she said.

Asked how the government will handle the concession with Umeme, the minister said there are provisions within the agreement which provide for situations that will either warrant exit or continuity.
“The concession we signed with Umeme has clauses of entry and exit, so if the spirit is that we are now having one national company providing electricity to the citizens, then we will have to use the clause that provides for exit of concession between government and Umeme. If it is otherwise, we shall invoke the clause of continuity,” Ms Anite said.

Mr Emmanuel Otaala, the committee chairperson, said they were trying to reduce the electricity tariffs.
Mr Otaala said the new Bill will ensure that losses are reduced, and eliminate commercial distributors.
“Over time, we have realised that having three different companies is expensive to the government with three boards, but we also recognise that the government has a key role to play because electricity supply should not be taken as a business but a service,” he said.

Mr Peter Kaujju, the head of communications at Umeme Ltd, yesterday told Monitor that the company is currently concentrating on delivering on the current terms of concession.
“We have a concession that runs up to 2025, and we have a lot of obligations to deliver. Three years is such a long time, and we don’t know what will happen by that time, but right now, we can’t speculate because we are concentrating on what we are supposed to deliver,” Mr Kaujju said.